CONCORD, NH, May 17, 2011 (Canada NewsWire via COMTEX) --
JAG - TSX/NYSE
Adjusted Q1 2011 Earnings of $0.12 Per Share and Operating Cash Flow of $0.23 Per Share
Jaguar Mining Inc. ("Jaguar" or the "Company") (JAG: TSX/NYSE) reports its financial and operational results for the period ended March 31, 2011. All figures are in U.S. dollars unless otherwise indicated.
Note: As required by applicable Canadian rules, effective Q1 2011, Jaguar has prepared its financial statements in accordance with International Financial Reporting Standards ("IFRS"), including the restatement of the comparative period previously reported under Generally Accepted Accounting Principles ("GAAP") in Canada.
Q1 2011 Highlights
-- Record revenue of $55.1 million, an increase of 36% over Q1 2010. -- Net income of $3.7 million or $0.04 per basic and fully diluted share. Adjusted net income, excluding special non-operating and non-recurring charges, most significant of which was a provision to value the conversion option embedded in convertible notes issued by the Company, totaled $10.3 million or $0.12 per basic and fully diluted share. (See Non-IFRS Performance Measures) -- Gross profit of $11.0 million, an increase of 48% from Q1 2010. -- Record cash operating margin per ounce of gold of $659, an increase of 31% from Q1 2010. -- Cash generated by operating activities totaled $19.4 million or $0.23 per fully diluted share, an increase of 71% from Q1 2010. -- Gold production of 41,449 ounces at an average cash operating cost of $727 per ounce compared to 31,223 ounces at an average cash operating cost of $597 per ounce in Q1 2010 (see Non-IFRS Performance Measures). The increase in production from the prior year was largely attributable to the addition of the CaetÃ(c) operation, which was commissioned in Q3 2010. Removing the effect of gold-in-process and stockpile inventory changes, the underlying operating cash cost was $663 per ounce. -- Gold ounces sold totaled 39,794, an increase of 8% from Q1 2010.| -- The average sales price per ounce totaled $1,386, an increase of 24% from Q1 2010. -- Investments of $20.2 million in growth projects, a decrease of 45% from Q1 2010.
Commenting on the Q1 2011 performance, Daniel R. Titcomb, Jaguar's President and CEO stated, "Our favorable Q1 2011 financial performance reflects the improvements we cited in the preliminary operating results we issued four weeks ago. As we move through the year, we expect further sequential gains in our quarterly gold production at lower costs."
Summary of Key Operating Results
The following is a summary of key operating results. Refer to the Adjusted Net Income table.
Summary of Key Operating Results
Quarter Quarter Ended March Ended March 31, 2011 31, 2010 Gold sales $ 55,140 $ 40,670 Ounces sold 39,794 36,888 Average sales price $/ounce 1,386 1,102 Gross profit 10,968 7,405 Adjusted net income (loss) 10,313 (3,665) (1 ) Adjusted basic and diluted $ 0.12 $ (0.04) net income per share(1) Weighted average number of 84,373,648 83,995,337 shares outstanding - basic Weighted average number of 84,385,392 98,538,285 shares outstanding - diluted (1) See Non-IFRS Performance Measures
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 Consolidated Financial Statements for the quarter ended March 31, 2011.
2011 Update of Operations
Operating results to-date are consistent with the initiatives the Company implemented during the second half of 2010 and its previously stated 2011 production target of between 195,000 and 205,000 ounces of gold.
Non-IFRS Performance Measures
The Company has included the non-IFRS performance measures discussed below in this press release. These non-IFRS performance measures do not have any standardized meaning prescribed by IFRS 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 IFRS, these non-IFRS measures provide investors with additional information that will better enable them to evaluate the Company's performance. Accordingly, these Non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared with IFRS.
The Company has included cash operating cost per ounce produced and cash operating margin per ounce because it believes these figures are a useful indicator of an operation'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 gold mining operations. Additionally, the Company has provided adjusted net income, which reflects the elimination of special non-operating and certain non-recurring charges that do not reflect on-going costs in Jaguar's operations or administrative costs; and cash flow from operations, which does not reflect the change in non-cash operating working capital. The definitions for these performance measures and reconciliation of the non-IFRS measures to reported IFRS measures are set out in the following tables.
Adjusted Net Income ($000s)
Quarter Quarter Ended Ended March 31, March 31, 2011 2010 Net income (loss) as $ 3,724 $ 26,818 reported Adjustments: Loss (gain) on conversion 1,340 (32,505) option embedded in convertible debt Effect of gold-in-process 2,546 - and stockpile inventory changes Non-cash interest expense 2,703 2,022 Adjusted net income (loss) 10,313 (3,665) Adjusted basic and diluted $ 0.12 $ (0.04) net income per share Cash Provided by Operating Activities ($000s) Quarter Ended Quarter Ended March 31, 2011 March 31, 2010 Cash provided by operating activities as reported Net income $ 3,724 $ 26,818 Adjustments to reconcile net earnings to net cash provided from (used in) operating activities: Unrealized foreign exchange (gain) loss (2,794) 397 Stock-based compensation (2,696) (643) Non-cash interest expense 3,064 2,171 Accretion of interest income (94) - Accretion expense 570 290 Deferred income taxes 455 1,644 Depletion and 11,477 amortization 8,122 Unrealized loss on derivatives - 699 Unrealized (gain) loss on option component of 1,340 (32,505) convertible note Reclamation expenditure (18) (78) $ 15,028 $ 6,915 Change in non cash operating working 4,361 $ 4,453 capital Cash provided by $ 19,389 $ 11,368 operating activities Cash provided by $ $ operating activities 0.23 0.14 per share Cash Operating Margin per oz gold Quarter Ended March 31 2011 2010 Average sales price per oz gold $ 1,386 $ 1,102 less Cash operating cost per oz gold produced 727 597 equals Cash operating margin per oz gold $ 659 $ 505
The following tables are included in Jaguar's audited financial statements as filed on SEDAR and EDGAR. Readers should refer to those filings for the associated footnotes which are an integral part of the tables.
JAGUAR MINING INC. Condensed Interim Consolidated Balance Sheets (Expressed in thousands of U.S. dollars) (unaudited) March 31, December 31, January 1, 2011 2010 2010 Assets Current assets: Cash and cash $ $ equivalents 135,543 39,223 $ 121,256 Inventory 29,066 31,495 36,986 Prepaid expenses and sundry assets 27,693 24,523 19,050 Derivatives 168 168 1,280 192,470 95,409 178,572 Prepaid expenses and sundry assets 48,721 48,582 35,837 Net smelter royalty 1,006 1,006 1,006 Restricted cash 908 908 108 Property, plant and equipment 356,635 348,815 262,748 Mineral exploration projects 75,953 74,658 62,236 $ $ 675,693 569,378 $ 540,507 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued $ $ liabilities 31,156 27,853 $ 22,892 Notes payable 23,482 26,130 5,366 Income taxes payable 17,687 16,677 15,641 Reclamation provisions 1,780 2,167 510 Deferred compensation liabilities 2,305 2,436 - Other liabilities 849 704 - 77,259 75,967 44,409 Notes payable 222,804 140,664 125,483 Option component of convertible notes 49,021 28,776 75,356 Deferred income taxes 676 215 450 Reclamation provisions 19,324 17,960 10,008 Deferred compensation liabilities 2,125 4,829 8,876 Other liabilities 290 497 738 Total liabilities 371,499 268,908 265,320 Shareholders' equity Share capital 369,747 369,747 365,667 Stock options 12,984 13,054 14,762 Contributed surplus 1,971 1,901 1,167 Deficit (80,508) (84,232) (106,409) Total equity attributable to equity shareholders of the Company 304,194 300,470 275,187 Commitments $ $ 675,693 569,378 $ 540,507 JAGUAR MINING INC. Condensed Interim Consolidated Statements of Operations and Comprehensive Income (Expressed in thousands of U.S. dollars, except per share amounts) (unaudited) Three Months Three Months Ended Ended March 31, March 31, 2011 2010 Gold sales $ 55,140 $ 40,670 Production costs (33,057) (25,140) Stock-based compensation 5 (127) Depletion and amortization (11,120) (7,998) Gross profit 10,968 7,405 Operating expenses: Exploration 334 1,107 Stock-based compensation (2,691) (770) Administration 5,256 4,297 Management fees 162 339 Amortization 357 124 Other 836 689 Total operating expenses 4,254 5,786 Income before the following 6,714 1,619 Loss (gain) on derivatives (287) 253 Loss (gain) on conversion option embedded in convertible debt 1,340 (32,505) Foreign exchange loss (gain) (3,089) 564 Accretion expense 570 290 Interest expense 5,682 4,028 Interest income (1,466) (1,361) Gain on disposition of property (719) (497) Total other expenses (recoveries) 2,031 (29,228) Income before income taxes 4,683 30,847 Income taxes Current income taxes 504 2,385 Deferred income taxes 455 1,644 Total income taxes 959 4,029 Net income and comprehensive income for the period $ 3,724 $ 26,818 Basic earnings per share $ 0.04 $ 0.32 Diluted earnings per share $ 0.04 $ 0.31 Weighted average number of common shares outstanding - basic 84,373,648 83,995,337 Weighted average common shares outstanding - diluted 84,385,392 98,538,285 JAGUAR MINING INC. Condensed Interim Consolidated Statements of Cash Flows (Expressed in thousands of U.S. dollars) (unaudited) Three Months Three Months Ended Ended March 31, March 31, 2011 2010 Cash provided by (used in): Operating activities: Net income and comprehensive income for the period $ 3,724 $ 26,818 Adjustments to reconcile net earnings to net cash provided from (used in) operating activities: Unrealized foreign exchange loss (gain) (2,794) 397 Stock-based compensation recovered (2,696) (643) Interest expense 3,064 2,171 Accretion of interest income (94) - Accretion expense 570 290 Deferred income taxes 455 1,644 Depletion and amortization 11,477 8,122 Unrealized loss on derivatives - 699 Unrealized loss (gain) on option component of convertible note 1,340 (32,505) Reclamation expenditure (18) (78) Change in non-cash operating working capital Inventory 2,267 2,209 Prepaid expenses and sundry assets (2,056) (2,936) Accounts payable and accrued liabilities 3,302 4,381 Income taxes payable 1,009 799 Deferred compensation liability (161) - 19,389 11,368 Financing activities: Issuance of common shares - 1,501 Increase in restricted cash - (800) Repayment of debt (3,818) (68) Increase in debt 99,313 3,542 Interest paid (361) (149) Other long - term liabilities (61) 164 95,073 4,190 Investing activities Short term investments - (5,811) Mineral exploration projects (2,345) (1,865) Purchase of property, plant and equipment (17,868) (35,065) (20,213) (42,741) Effect of foreign exchange on non-U.S. dollar denominated cash and cash equivalents 2,071 980 Increase (decrease) in cash and cash equivalents 96,320 (26,203) Cash and cash equivalents, beginning of period 39,223 121,256 Cash and cash equivalents, end of period $ 135,543 $ 95,053
Departure of Corporate Officer
Mr. Robert Zwerneman, Jaguar's Vice President of Corporate Development and Director of Investor Relations, has notified the Company he will be resigning from Jaguar in order to pursue an employment opportunity with another firm. Mr. Zwerneman has been with the Company since October 2006 and will remain for a period of time in a transitional role until a suitable replacement can be found. His service as an officer of the Company will come to an end on May 19, 2011.
Conference Call Details
The Company will hold a conference call tomorrow, May 18 at 9:00 a.m. EDT, to discuss the results.
Conference Call Details:
From North 800-476-0592 America: 213-416-2192 International: Replay: From North America: International: 800-675-9924 213-416-2185 Replay ID: 51811 www.jaguarmining.com Webcast:
A presentation will be available prior to the call on the Company's homepage at www.jaguarmining.com.
Jaguar is a gold producer in Brazil with operations in a prolific greenstone belt in the state of Minas Gerais. Jaguar is also engaged in developing the Gurupi Project in the state of Maranhão. Based on its development plans, Jaguar is one of the fastest growing gold producers in Brazil. The Company is actively exploring and developing additional mineral resources at its approximate 256,300-hectare land base in Brazil. Additional information is available on the Company's website at www.jaguarmining.com.
Forward Looking Statements
This press release contains forward-looking statements, within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, concerning the Company's expectation to realize further sequential gains in its quarterly production during 2011 as well as achieve gold production of between 195,000 and 205,000 ounces for the year ending December 31, 2011. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, or performance 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 labor and equipment, the possibility of labor 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.
The forward-looking statements represent our view as of the date of discussion. The Company anticipates that subsequent events and developments may 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 except as required by law. 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, 2010 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, 2010 filed with the United States Securities and Exchange Commission and available at www.sec.gov.