Jaguar Mining Reports Q3 2018 Operating Performance; Pilar Mine Continues to Deliver Record Results

Oct 10, 2018 Download PDF

Toronto, October 10, 2018 – Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX: JAG) today announced operating results for the third quarter (“Q3 2018”) ended September 30, 2018. All figures are in US dollars, unless otherwise expressed. Detailed financial results for Q3 2018 will be reported and filed on or before November 15, 2018.

Q3 2018 Key Highlights

  • Gold production of 20,320 ounces (175,566 tonnes milled), record production at Pilar Gold Mine (“Pilar”)
  • Consolidated average feed grade of 4.01 g/t, up 16% year-over-year
  • Pilar record production of 11,068 ounces, up 13%; higher average grade of 4.40 g/t, up 14%, year-over-year
  • Turmalina Gold Mine (“Turmalina”) initiated an action plan to return to historical production levels
  • Turmalina production of 9,251 ounces declined 4% year-over-year, up 18.2% over Q2 2018
  • Average grade at Turmalina increased to 3.62 g/t, up 14% year-over-year
  • Primary development increased 43% at Turmalina (780m) and 28% at Pilar (656m) improving mining flexibility
  • Preliminary consolidated cash operating costs improved 22% to $630 per ounce sold year-over-year and 12% from Q2 2018
  • Pilar achieves record low cash costs $560 per ounce sold, decreased 30%, driving higher margin per ounce and operating cash flow
  • Preliminary cash balance of $6.6 million at September 30, 2018, reflects approximately $6 million in operating cash flow, $7.2 million invested in growth activities and $1.3 million paid in financing activities

Ben Guenther, Interim President and Chief Executive Officer commented, “We ended the third quarter with a marked improvement in production and average grade compared to the prior two quarters in 2018 while operating cash costs improved to below $630 per ounce. This performance reflects a third consecutive quarter of increasing record production at Pilar and a solid improvement in production at Turmalina. Pilar continues to demonstrate its ability to deliver low cost, quality ounces and as a result, Pilar has transformed to a new lower cost producer. We are also pleased with the progress made at Turmalina during the quarter. Our new team is executing an action plan to increase mining flexibility and we expect to see production return to historical levels at Turmalina over the next 18 months. We look forward to continuing on our path to growth in the fourth quarter and beyond.”

Quarterly SummaryQ3 2018Q3 2017
TurmalinaPilarRoça GrandeTotalTurmalinaPilarRoça GrandeTotal
Tonnes milled (t)88,17387,394-175,566106,62987,60517,636211,870
Average head grade (g/t)3.624.40-
Recovery %90.1%89.6%-89.8%90.5%90.4%90.5%90.5%
Gold ounces        
   Produced (oz)9,25111,068-20,3209,6169,6741,49120,781
   Sold (oz)8,60811,832-20,4419,0829,8201,51920,422
Cash Operating Costs726560-6307498041,195809
   Primary (m)780656-1,43644347118932
   Secondary (m)558169-72733751867922
Definition, infill, and exploration drilling (m)  8,203  3,513  -  11,715  8,355  3,237  -  11,592
  1. Roça Grande mine was put under care & maintenance in the first quarter of 2018.
  2. Cash Operating Cost is a non-IFRS reporting measure.

Cash Position and Use of Funds

  • Cash balance of approximately $6.6 million as of September 30, 2018, compared to a cash balance of $9.1 million at June 30, 2018
  • Company generated approximately $6 million in operating cash flow with approximately $7.2 million spent in investing growth activities representing mainly in development expenditures. In addition $1.3 million was paid in financing activities

Third Quarter 2018 Operating Mine Update Pilar

  • Pilar continued to deliver strong performance as record production reflects improving average grade and strong plant recovery levels.
  • Pilar’s main ramp development is currently two levels below current mining. This gives the mine considerable flexibility in mine planning as well as additional time to complete infill drilling for grade determination.
  • Operational Excellence continues to assist mining operators understand existing and potential bottlenecks, and how to address them. Operational Excellence initiatives have benefited Pilar as the mine is well developed and management can focus on operational improvements.
  • Turmalina mine management has initiated an action plan to focus on the following key priorities at Turmalina including:
    • Modifying the mining approach to minimize the number of unfilled open stopes. Converting from blind back stopes to sublevel stoping and ensure minimal exposure from unfilled stope walls
    • Utilization of top down drilling to ensure better quality control on drilling, reduce dilution, improve mining recovery, and allow backfilling with waste rock
    • Strict adherence to backfilling in the stoping cycle to reduce unfilled open stopes
    • Use of better blasting techniques to reduce vibration into the rock mass
    • Improving ore control drilling, planning and execution to improve confidence in the ore production plan
    • Improving development planning and execution to give a high confidence in the mine production schedule
  • Mining will now progress from the bottom sublevel to the top sublevel of every ore panel which does require more initial development. This approach allows backfilling in the stope cycle and provides better control of over-break, less dilution, and improved mining recovery while also minimizing geotechnical issues created through the blind back-stope method
  • A focus on ramp development and diamond drilling will create operational flexibility and more confidence in mine production delivering to plan
  • During Q3 mine operations started paste-filling upper levels of the mine for the first time since the paste-fill plant was commissioned. Paste-fill will continue to be used to fill stopes left open in upper areas of the mine as paste-fill is expected to improve rock stability and extraction ratio. This will provide an opportunity for added ore from pillar recovery

Third Quarter 2018 Exploration Highlights

  • Turmalina growth exploration drilling targeting orebody C down dip extensions below Level 3 continued during the quarter with one rig in operation. As previously reported this drilling has confirmed the continuity of the gold bearing structure beyond Level 8, approximately 300 m below current operations. The current drilling phase is being conducted in parallel with detailed geological and structural mapping of orebody C exposed in ongoing underground production development and is expected to be completed during Q4 2018
  • Trenching and channel sampling of gold in soil anomalies at the Zona Basal Target at Turmalina commenced in Q3 and the initial phase of this work is planned to be completed by early November prior to the onset of the wet season. Preliminary results from this work are expected to be reported in December 2018
  • A comprehensive revision of historical exploration work over the Pedra Branca Project in Ceará was completed during Q3. The Pedra Branca database has been re-formatted to better reflect the historical soil, stream, rock- chip, drilling and trenching data and updated geological mapping. Options for progressing this project are being evaluated by the Jaguar team

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”).

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. The Roça Grande Mine has been on temporary care and maintenance since April 2018. Additional information is available on the Company's website at

For further information please contact:

Ben Guenther
President & Chief Executive Officer
Jaguar Mining Inc.

Hashim Ahmed
Chief Financial Officer Jaguar Mining Inc.