TORONTO, May 13, 2013, 2013 (Canada NewsWire via COMTEX) - JAG - TSX/NYSE
Jaguar Mining Inc. ("Jaguar" or the "Company") (JAG: TSX/NYSE) today reported a net loss of $6.9 million or $0.08 per fully diluted share for the quarter ended March 31, 2013. This result compares to a net income of $2.8 million or $0.03 per fully diluted share in the first quarter of 2012. The first quarter 2013 result includes an interest expense of $8.2 million, a loss on disposition of property of $1.7 million, and a $1.1 million unrealized non-cash gain on the conversion option embedded in convertible debt (see note 1). Excluding these non-operating items, Jaguar's first quarter result was a net income of $1.9 million or $0.04 per fully diluted share.
First Quarter Highlights
- 4% increase in gold production (excluding Paciàªncia) from 23,895 ounces in Q1 2012 to 24,836 ounces in Q1 2013;
- 32% decrease in cash operating cost per ounce (excluding Paciàªncia) from $1,212 in Q1 2012 to $826 in Q1 2013;
- 45% reduction in total headcount (including Paciàªncia) from 2,202 in Q1 2012 to 1,210 in Q1 2013;
- 33% reduction in total administrative expenses from $6.3 million in Q1 2012 to $2.4 million in Q1 2013;
- New COO and CFO appointed;
- $30.0 million Renvest Credit Facility closed;
- $18.4 million quarter ending cash balance as at March 31, 2013;
- $3.8 million increase in working capital, from ($21.3) million at December 31, 2012 to ($17.5) million at March 31, 2013.
During the first quarter 2013, Jaguar sold 25,316 ounces of gold at an average realized price of $1,626 per ounce. This compared to sales of 30,138 ounces of gold at an average realized price of $1,691 per ounce in the three months ended March 31, 2012. Average cash operating cost per ounce was $826 in the first quarter 2013 compared to $1,268 in the first quarter 2012. Cash operating margin was $800 per ounce in the first quarter 2013 compared to $423 per ounce in the first quarter 2012. The decrease in the Company's average cash operating cost per ounce during the first quarter 2013 as compared to the first quarter 2012 was attributable to Jaguar's on-going cost reduction and operational improvement program which included placing the Paciência operation on care and maintenance beginning in May 2012, reduced headcount at the mining operations and continued focus on reducing dilution and improving safety and productivity.
Gold production for the quarter ended March 31, 2013 totaled 24,836 ounces compared to 31,233 ounces of gold in the first quarter of 2012. The decline in comparative quarterly production levels was the result of the Company's decision to place the Paciência operation on care and maintenance beginning in May 2012 and a transition of mining and ground support methods which, during the course of implementation, negatively impacted production cycle times in the Turmalina operation.
Commenting on the Company's results, David Petroff, Jaguar's President and CEO stated: "The operating team is continuing to deliver on the budget set in December 2012. Production targets are being met. The focus remains on stabilizing operations, to ensure safety is a priority and that the gains made in the first quarter can be continued during the balance of the year. Renvest has confirmed the $25 million undrawn amount under the $30 million credit facility is now available. In light of the recent reduction in the price of gold, the Company is re-examining all sources and uses of cash with a view to reducing net cash outlays while maintaining the turnaround efforts. The support from all levels of Jaguar's employees, management and other service providers has been crucial in delivering these results. Their efforts are much appreciated and we look forward to building on them".
Summary of Key Operating Results - Consolidated
Three Months Ended March 31, 2013 2012 ($ in 000s, except per share amounts) Gold sales $ 41,170 $ 50,972 Ounces sold 25,316 30,138 Average sales price $ / ounce 1,626 1,691 Cash operating cost $ / ounce 826 1,268 Gross profit (loss) 10,382 (3,677) Net income (loss) (6,926) 2,809 Basic income (loss) per share (0.08) 0.03 Diluted income (loss) per share (0.08) 0.03 Weighted avg. # of shares outstanding - 84,906,423 84,409,648 basic Weighted avg. # of shares outstanding - 84,906,423 84,431,344 diluted
Key Operating Statistics by Operation
Three Months Ended March 31, 2013 Operating Data Ore Feed Plant Production Cash Cash Processed Grade Recovery (ounces) Operating Operating (t000) (g/t) Rate (%) Cost/t Cost/ounce Turmalina 108 3.33 89% 10,321 $ $ 862 82.50 Caeté 157 3.26 88% 14,515 73.38 801 Total 265 3.30 88% 24,836 $ $ 826 77.10 Three Months Ended March 31, 2012 Operating Data Ore Feed Plant Production Cash Cash Processed Grade Recovery (ounces) Operating Operating (t000) (g/t) Rate (%) Cost/t Cost/ounce Turmalina 157 2.02 90% 10,014 $ $ 85.30 1,342 Paciàªncia 134 2.21 90% 7,338 79.20 1,451 Caeté 156 3.08 89% 13,881 95.50 1,118 Total 447 2.45 90% 31,233 $ $ 87.00 1,268
The Company reiterates 2013 gold production guidance of between 85,000 to 95,000 ounces and cash operating costs are expected to be in the range of $950 to $1,100 per ounce (based on an assumed exchange rate of R$2.0 per US$1.0). Capital expenditures for 2013 are anticipated to be approximately $36.6 million of which $21.7 million is expected to be spent at Caeté and $12.7 million at Turmalina. Capital expenditures for 2013 are targeted at development, infill diamond drilling and resource diamond drilling to improve the quality of information available to the mining teams so appropriate decisions can be made concerning grade control and plant feed.
Conference Call Details
Members of the Jaguar senior management team will hold a conference call to discuss the first quarter results and operations on Tuesday, May 14, 2013 at 1:00 p.m. ET. The call can be accessed via telephone or webcast.
Live Teleconference Access:
US/Canada Toll-Free Dial-In Number: (877) 201-0168 with Conference ID: 68812305 International Dial In: (647) 788-4901 with Conference ID: 68812305
Live audio webcast:
US/Canada Dial-In: (855) 859-2056 with Conference ID: 68812305 International Dial-In: (404) 537-3406 with Conference ID: 68812305
About Jaguar Mining
Jaguar is a junior gold producer in Brazil with operations in a prolific greenstone belt in the state of Minas Gerais and owns the Gurupi Project in Northern Brazil in the state of Maranhão. The Company also owns additional mineral resources at its approximate 210,000-hectare land base in Brazil. 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. These Forward-Looking Statements include, but are not limited to, statements concerning the Company's 2013 estimated gold production and cash operating cost. 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 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 Statements, there may be other factors that could 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 of this press release. 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, 2012 filed on SEDAR and available at http://www.sedar.com and the Company's Annual Report on Form 40-F for the year ended December 31, 2012 filed with the United States Securities and Exchange Commission and available at www.sec.gov.
Note: As required by applicable Canadian rules, effective the first quarter of 2011, Jaguar has prepared its financial statements in accordance with International Financial Reporting Standards ("IFRS").
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 period ended March 31, 2013.
The following tables contain information for the quarter ended March 31, 2013. The data presented are subject to final adjustment, but are believed to be materially accurate. Jaguar's unaudited interim financial statements for the period ended March 31, 2013 were filed on SEDAR and EDGAR on May 13, 2013. Readers should refer to those filings for the final unaudited interim financial statements and 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, 2013 2012 Assets Current assets: Cash and cash $ 18,385 $ 13,856 equivalents Inventory 25,829 26,342 Recoverable taxes 8,615 9,031 Prepaid expenses and 12,351 11,038 sundry assets Derivatives 141 43 65,321 60,310 Prepaid expenses and 3,026 2,428 sundry assets Restricted cash 109 609 Assets held for sale 1,843 612 Recoverable taxes 53,771 54,458 Property, plant and 296,059 301,383 equipment Mineral exploration 84,435 84,075 projects $ 504,564 $ 503,875 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and $ 27,148 $ 29,745 accrued liabilities Notes payable 27,561 27,388 Income taxes payable 16,015 15,451 Reclamation 4,257 4,124 provisions Other provisions 7,767 4,796 Deferred compensation 55 105 liabilities Other liabilities 19 20 82,822 81,629 Notes payable 247,395 240,158 Option component of 3,336 4,458 convertible notes Deferred income 6,587 6,624 taxes Reclamation 16,611 16,927 provisions Deferred compensation 193 216 liabilities Other liabilities 73 60 Total liabilities 357,017 350,072 Shareholders' equity: Share capital 370,603 370,043 Stock options 1,705 2,137 Contributed surplus 16,557 16,015 Deficit (241,318) (234,392) Total equity attributable to equity 147,547 153,803 shareholders of the Company $ 504,564 $ 503,875 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 Three Months Ended Ended March 31, March 31, 2013 2012 Gold sales $ 41,170 $ 50,972 Production costs (22,819) (41,399) Stock-based compensation - 43 Depletion and amortization (7,969) (13,293) Gross profit (loss) 10,382 (3,677) Operating expenses: Exploration 327 45 Paciàªncia care and maintenance 708 - Stock-based compensation 222 (808) (recoveries) Administration 4,213 6,315 Management fees - 30 Amortization 292 289 Other 2,984 401 Total operating expenses 8,746 6,272 Income (loss) before the 1,636 (9,949) following Gain on derivatives (482) - Gain on conversion option (1,122) (14,325) embedded in convertible debt Foreign exchange gain (647) (3,175) Accretion expense 457 595 Interest expense 8,174 7,123 Interest income (260) (1,858) Loss (gain) on disposition of 1,735 (278) property Other non-operating expenses 504 (27) (recoveries) Total other expenses (income) 8,359 (11,945) Income (loss) before income (6,723) 1,996 taxes Income taxes Current income taxes 338 319 Deferred income taxes (135) (1,132) (recoveries) Total income taxes (recoveries) 203 (813) Comprehensive income (loss) for $ (6,926) $ 2,809 the period 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, 2013 2012 Cash provided by (used in): Operating activities: Net income (loss) and comprehensive $ (6,926) $ 2,809 income (loss) for the period Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Unrealized foreign exchange gain (1,202) (5,053) Stock-based compensation expense 222 (851) (recovery) Interest expense 8,174 7,123 Accretion expense 457 595 Deferred income taxes (135) (1,132) Depletion and amortization 8,261 13,582 Unrealized gain on derivatives (98) - Unrealized gain on option component (1,122) (14,325) of convertible note Provision and loss on disposition of 2,224 - property, plant and equipment Inventory recovery - (828) Reclamation expenditure (12) (103) 9,843 1,817 Change in non-cash operating working capital: Inventory 436 (2,080) Recoverable taxes 3,017 (1,957) Prepaid expenses and sundry assets (2,601) (826) Accounts payable and accrued (3,095) (1,378) liabilities Income taxes payable 564 (408) Other provisions 2,971 317 Deferred compensation liabilities (64) (1,612) 11,071 (6,127) Financing activities: Repayment of debt (7,098) (1,100) Increase in debt 11,762 6,000 Decrease in restricted cash 500 - Interest paid (3,963) (3,152) Other liabilities 11 (79) 1,212 1,669 Investing activities: Mineral exploration projects (367) (5,162) Purchase of property, plant and (7,316) (18,976) equipment Proceeds from disposition of property, 227 - plant and equipment (7,456) (24,138) Effect of foreign exchange on non-U.S. dollar denominated cash and cash equivalents (298) 3,984 Increase (decrease) in cash and cash 4,529 (24,612) equivalents Cash and cash equivalents, beginning of 13,856 74,475 period Cash and cash equivalents, end of period $ 18,385 $ 49,863
Note 1 - Fair Valuation of Derivative Financial Instruments - Option Component of Convertible Notes
IFRS requires that derivative financial instruments be valued on a periodic basis. The option components of the Company's convertible notes are considered derivative financial instruments and are fair valued using the Crank - Nicolson valuation model using inputs, such as volatility and credit spread.
The carrying amount of the option components of the convertible notes was $3.3 million at March 31, 2013 (December 31, 2012 - $4.5 million). The change in fair value of $1.1 million for the three-months ended March 31, 2013 is shown as a gain on conversion option embedded in convertible debt in the statements of operations and comprehensive loss (period ended March 31, 2012 - $14.3 million gain).
T. Douglas Willock, Chief Financial Officer