CONCORD, NH, Aug. 10, 2011, 2011 (Canada NewsWire via COMTEX) --
JAG - TSX/NYSE
Q2 2011 Highlights
-- Net income of $15.6 million or $0.18 per basic and fully diluted share. -- Cash from operating activities generated a total of $21.7 million or $0.26 per basic and fully diluted share, an increase of $19.7 million from Q2 2010. -- Record revenue of $60.6 million, an increase of 64% from Q2 2010. -- Gold production of 40,257 ounces, an increase of 32% from Q2 2010. -- Record gold ounces sold totaled 40,184, an increase of 31% from Q2 2010. -- Record cash operating margin per ounce of gold of $708, an increase of 55% from Q2 2010. -- EBITDA of $33.1 million, an increase of $34.7 million from Q2 2010.
Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX: JAG) (NYSE: JAG) today reported a net income of $15.6 million or $0.18 per basic and fully diluted share for the quarter ended June 30, 2011. The income was generated from gold sales of $60.6 million, a quarterly record for the Company. Cash generated from operating activities during the quarter totaled $21.7 million or $0.26 per basic and diluted share. These results compare favorably to gold sales of $36.9 million, a net loss of $14.2 million and cash generated from operating activities of $2.0 million as reported in Q2 2010.
Commenting on the Q2 2011 results, Daniel R. Titcomb, Jaguar's President and CEO stated, "We are pleased to report strong results with a number of records for the quarter. We are continuing to see the positive impact of the team's focused effort to improve and expand our operations. There is more work to be done to realize our growth potential and maximize shareholder value. However, this quarter is another indication that we are headed in the right direction with improvement in all of the major operating areas."
The Company's operations produced 40,257 ounces of gold during the quarter, an increase of 32% compared to Q2 2010. The increase was driven largely by the addition of the Caeté operation which was commissioned in Q3 2010. Nearing the end of Q2 2011, the Caeté operation experienced a mechanical issue in its mill which resulted in an extended shut-down to perform necessary maintenance and repairs, successfully completed in early July.
As gold prices in world markets continued to increase, Jaguar was able to sell a record 40,184 ounces during Q2 2011 at a record average realization of $1,507 per ounce. The increased realization per ounce more than offset the increase in average cash operating cost, leading to a record cash operating margin of $708 per ounce. Average cash operating cost for the quarter was $799 per ounce compared to $746 per ounce in Q2 2010 (see Non-IFRS Performance Measures in the accompanying tables). The cost increase was driven largely by a combination of continuing adverse exchange rates, the temporary shut-down of the Caeté mill and general cost inflation for labor and mining supplies.
The Q2 2011 results include a non-cash gain of $9.2 million related to the conversion option embedded in the Company's convertible debt and $3.2 million in non-cash interest expense. Excluding these items, adjusted net income for the second quarter 2011 was $9.6 million or $0.11 per basic and diluted share. This compares to an adjusted net loss of $4.6 million or $0.05 per basic and diluted share in Q2 2010.
For the first six months of 2011, Jaguar sold 79,978 ounces of gold and reported total revenue of $115.7 million, net income of $19.3 million and cash generated from operating activities of $41.1 million, or $0.49 per basic and fully diluted share. These results compared to 67,535 ounces of gold sold, total revenue of $77.5 million, net loss of $12.6 million and cash generated from operating activities of $13.4 million during the first six months of 2010. The increases in ounces of gold sold and total revenue are largely the result of the growing contribution of the Caeté operation, which was commissioned in Q3 2010. Total revenue was also driven higher by record average price realization per ounce.
The following is a summary of key operating results for the three and six month periods ended June 30, 2011 and comparable measures for the relevant prior year periods.
Summary of Key Operating Results
Quarter Ended Six Months Ended June 30 June 30 2011 2010 2011 2010 (unaudited) ($ in 000s, except per share amounts) Gold sales $ 60,557 $ 36,853 $ 115,697 $ 77,522 Ounces sold 40,184 30,646 79,978 67,535 Average sales price ($ per 1,507 1,203 1,447 1,148 ounce) Gross profit 12,849 2,132 23,818 9,536 Net income (loss) 15,586 (14,238) 19,310 12,580 Basic income 0.18 (0.17) 0.23 0.15 (loss) per share Diluted income 0.18 (0.17) 0.23 0.15 (loss) per share Weighted avg. # of shares outstanding 84,373,648 84,128,483 84,373,648 84,062,278 - basic Weighted avg. # of shares outstanding 84,376,376 84,128,483 84,377,786 84,062,278 - diluted
Development and Outlook
During Q2 2011, Jaguar completed 6.1 kilometers of underground development and added 19 new working faces to its existing mines. This achievement effectively improves overall operational flexibility, providing opportunities for increasing total production, resulting from the ability to more effectively manage the consistency of head feed grades in future periods. In addition, Jaguar continues to advance various brownfield exploration programs at and around its existing mining complexes as well as carrying out pre-development work for exploration, site services and infrastructure at its Gurupi Project in the Northern Brazilian state of Maranhão.
Although Q2 2011 production was impacted by the mill issues at Caeté, Jaguar's management believes its year-to-date operating results, mine improvements and new development are consistent with achieving 2011 production at the lower end of the guidance range. During Q2 2011, Jaguar reduced future operational risks by securing labor union agreements for the next twelve months as well assecuring power allocations for all operations through mid-2012. Jaguar also continued to expand and update its mining fleet, adding 14 LHD units and 8 haul trucks and other essential pieces of equipment for its underground operations, which should lower execution risks through the remainder of2011 and beyond.
"This is a very exciting time for Jaguar, our employees and our shareholders," Titcomb said. "Getting our operations righted could not come at a better time as current market dynamics will enable us to get record prices for each additional ounce we can produce. As we execute on our operating and expansion plans, we believe the Company's future is bright."
Conference Call Details
Members of the Jaguar senior management team will hold a conference call to discuss the Q2 2011 results and operations on Thursday, August 11, 2011 at 10:00 a.m. ET. The call can be accessed via telephone or webcast.
Conference Call Details: From North 888-702-7351 America: International: 307-426-4779 Replay: From North 800-675-9924 America: International: 213-416-2185 Replay ID: 81111 Webcast: www.jaguarmining.com
A slide presentation to accompany the conference call discussion 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 ability to improve overall operational flexibility, providing opportunities for increasing total production as well as achieving 2011 production at the lower end of the range.
These forward-looking statements can be identified by the use of the words "believes", "intends", "plans", "expects", "expected" and "will". 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 stoppagesand 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.
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.
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 June 30, 2011.
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) June 30, 2011 December 31, 2010 Assets Current assets: Cash and cash equivalents $ 125,400 $ 39,223 Inventory 30,982 31,495 Prepaid expenses and sundry assets 37,324 24,523 Derivatives 197 168 193,903 95,409 Prepaid expenses and sundry assets 46,965 48,582 Net smelter royalty 1,006 1,006 Restricted cash 908 908 Property, plant and equipment 368,178 348,815 Mineral exploration projects 78,161 74,658 $ 689,121 $ 569,378 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued $ 35,472 $ 27,853 liabilities Notes payable 20,402 26,130 Income taxes payable 19,898 16,677 Reclamation provisions 2,312 2,167 Deferred compensation liabilities 2,628 2,436 Other liabilities 1,065 704 81,777 75,967 Notes payable 224,706 140,664 Option component of convertible notes 39,841 28,776 Deferred income taxes 1,468 215 Reclamation provisions 20,098 17,960 Deferred compensation liabilities 1,370 4,829 Other liabilities 81 497 Total liabilities 369,341 268,908 Shareholders' equity Share capital 369,747 369,747 Stock options 11,621 13,054 Contributed surplus 3,334 1,901 Deficit (64,922) (84,232) Total equity attributable to equity 319,780 300,470 shareholders of the Company $ 689,121 $ 569,378 JAGUAR MINING INC. Condensed Interim Consolidated Statements of Operations and Comprehensive Income (Loss) (Expressed in thousands of U.S. dollars, except per share amounts) (unaudited) Three Months Ended Three Months Six Months Six Months June 30, Ended Ended Ended 2011 June 30, 2010 June 30, 2011 June 30, 2010 Gold sales $ 60,557 $ 36,853 $ 115,697 $ 77,522 Production costs (36,837) (25,683) (69,893) (50,823) Stock-based (28) (253) (23) (380) compensation Depletion and (10,843) (8,785) (21,963) (16,783) amortization Gross profit 12,849 2,132 23,818 9,536 Operating expenses: Exploration 717 1,171 1,051 2,279 Stock-based (393) 1,945 (3,084) 1,175 compensation Administration 5,419 4,819 10,674 9,116 Management 363 297 524 636 fees Amortization 313 126 670 250 Other 234 329 1,071 1,018 Total operating 6,653 8,687 10,906 14,474 expenses Income (loss) before the 6,196 (6,555) 12,912 (4,938) following Loss (gain) on (126) (61) (413) 192 derivatives Loss (gain) on conversion option embedded (9,180) 7,656 (7,840) (24,849) in convertible debt Foreign exchange (6,527) 1,011 (9,616) 1,575 loss (gain) Accretion 624 276 1,194 566 expense Interest 7,074 4,316 12,757 8,344 expense Interest income (2,867) (1,146) (4,332) (2,507) Gain on disposition of (472) (4,956) (998) (5,453) property Other non-operating (128) - (321) - expenses Total other expenses (11,602) 7,096 (9,569) (22,132) (income) Income (loss) before income 17,798 (13,651) 22,481 17,194 taxes Income taxes Current income 1,428 139 1,933 2,523 taxes Deferred 784 448 1,238 2,091 income taxes Total income 2,212 587 3,171 4,614 taxes Net income (loss) and comprehensive $ 15,586 $ (14,238) $ 19,310 $ 12,580 income (loss) for the period Basic earnings (loss) per $ 0.18 $ (0.17) $ 0.23 $ 0.15 share Diluted earnings $ 0.18 $ (0.17) $ 0.23 $ 0.15 (loss) per share Weighted average number of common shares 84,373,648 84,128,483 84,373,648 84,062,278 outstanding - basic Weighted average common shares 84,376,376 84,128,483 84,377,786 84,062,278 outstanding - diluted JAGUAR MINING INC. Condensed 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, 2011 2010 2011 2010 Cash provided by (used in): Operating activities: Net income (loss) and comprehensive income (loss) for the period $ 15,586 $ (14,238) $ 19,310 $ 12,580 Adjustments to reconcile net earnings to net cash provided from (used in) operating activities: Unrealized foreign exchange loss (gain) (3,955) 2,307 (6,749) 2,705 Stock-based compensation expense (recovered) (365) 2,198 (3,061) 1,555 Interest expense 7,074 4,316 12,757 8,344 Accretion of interest income (94) - (188) - Accretion expense 624 276 1,194 566 Income taxes (104) - (104) - Deferred income taxes 784 448 1,238 2,091 Depletion and amortization 11,156 8,911 22,633 17,033 Unrealized loss (gain) on derivatives (28) 473 (29) 1,172 Unrealized loss (gain) on option component of convertible note (9,180) 7,656 (7,840) (24,849) Gain on disposition of property - (4,625) - (4,625) Reclamation expenditure (8) (995) (26) (1,074) 21,490 6,727 39,135 15,498 Change in non-cash operating working capital Inventory (1,334) (3,343) 933 (1,134) Prepaid expenses and sundry assets (5,420) (2,545) (7,476) (5,482) Accounts payable and accrued liabilities 4,697 940 5,380 3,464 Income taxes payable 2,315 206 3,325 1,005 Deferred compensation liability (83) - (244) - 21,665 1,985 41,053 13,351 Financing activities: Issuance of common shares - 450 - 1,952 Increase in restricted cash - - - (800) Repayment of debt (4,117) (3,464) (7,935) (3,533) Increase in debt - 7,575 99,313 11,116 Interest paid (4,254) (4,942) (4,615) (5,091) Other liabilities 7 62 (55) 226 (8,364) (319) 86,708 3,870 Investing activities Short-term investments - (51) - (5,862) Mineral exploration projects (2,266) (4,256) (4,611) (6,120) Purchase of property, plant and equipment (23,735) (32,207) (41,602) (67,270) (26,001) (36,514) (46,213) (79,252) Effect of foreign exchange on non-U.S. dollar denominated cash and cash equivalents 2,557 (1,581) 4,629 (601) Increase (decrease) in cash and cash equivalents (10,143) (36,429) 86,177 (62,632) Cash and cash equivalents, beginning of period 135,543 95,053 39,223 121,256 Cash and cash equivalents, end of period $ 125,400 $ 58,624 $ 125,400 $ 58,624
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) Six Months Six Months Quarter Ended Quarter Ended Ended June Ended June June 30 2011 June 30 2010 30 2011 30 2010 Net income (loss) as $ 15,586 $ (14,238) $ 19,310 $ 12,580 reported Adjustments: Loss (gain) on conversion option (9,180) 7,656 (7,840) (24,849) embedded in convertible debt Non-cash interest 3,200 2,000 5,903 3,983 expense Adjusted net 9,606 (4,582) 17,373 (8,286) income (loss) Adjusted basic and diluted net $ 0.11 $ (0.05) $ 0.21 $ (0.10) income per share Cash Provided by Operating Activities ($000s) Quarter Ended Six Months Six Months June 30 2011 Quarter Ended Ended June Ended June June 30 2010 30 2011 30 2010 Cash provided by operating activities as reported Net income $ 15,586 $ (14,237) $ 19,310 $ 12,580 Adjustments to reconcile net earnings to net cash provided from (used in) operating activities: Unrealized foreign exchange (gain) loss (3,955) 2,307 (6,749) 2,705 Stock-based compensation (365) 2,198 (3,061) 1,555 Non-cash interest expense 7,074 4,316 12,757 8,344 Accretion of interest income (94) - (188) - Accretion expense 624 276 1,194 566 Income taxes (104) - (104) - Deferred income taxes 784 448 1,238 2,091 Depletion and amortization 11,156 8,911 22,633 17,033 Unrealized loss on derivatives (28) 473 (29) 1,172 Unrealized (gain) loss on option component of convertible note (9,180) 7,656 (7,840) (24,849) Gain on disposition of property - (4,625) - (4,625) Reclamation (8) (26) (1,074) expenditure (995) $ 21,490 $ 6,728 $ 39,135 $ 15,498 Change in non cash operating working capital 175 $ (4,743) 1,918 $ (2,147) Cash provided by operating activities $ 21,665 $ 1,985 $ 41,053 $ 13,351 Cash provided by operating activities per share $ 0.26 $ 0.02 $ 0.49 $ 0.16 Cash Operating Margin per oz gold Quarter Ended Six Months Ended June 30 June 30 2011 2011 Average sales price per oz gold $ 1,507 $ 1,447 less Cash operating cost per oz gold 799 763 produced equals Cash operating margin per oz gold $ 708 $ 684
Investors and Analysts may contact:
Roger Hendriksen, Vice President,
Members of the media may contact:
Valeria Rezende DioDato, Director of Communication