Jaguar Mining Reports Fourth Quarter and Full Year 2019 Financial Results
Positioned for Free Cash Flow and Significantly Reduced Debt in 2020
TORONTO, March 30, 2020 - Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX: JAG) today announced financial results for the fourth quarter ("Q4 2019") and year ("FY 2019") ended December 31, 2019. All figures are in US Dollars, unless otherwise expressed.
Q4 2019 Financial Highlights
- Gold production increased 18% with 20,029 ounces compared to 17,622 ounces in Q4 2018;
- Consolidated Cash Operating Costs ("COC") decreased 2% to $780 per ounce;
- Consolidated All-in Sustaining Costs ("AISC") decreased 3% to $1,239 per ounce;
- Net Income of $2.7 million; cash generated from operating activities of $9.7 million;
- Sustaining capital expenditures of $8.5 million invested in development and mining equipment, with free cash flow of $1.2 million;
- Strong liquidity as at December 31, 2019, with a cash and unsold bullion balance of $11.7 million, as compared to $12.1 million of cash and unsold bullion on September 30, 2019;
- Paid down 100% of outstanding gold loan to Auramet providing more liquidity to the balance sheet and cash flow for 2020; $1.1 million in finance payments were made in Q4 2019.
FY 2019 Financial Highlights
- Gold production remained steady at 74,084 ounces compared to 75,048 ounces in FY 2018;
- Gross profit increased 9.8% to $23.2 million, reflecting increased average realized gold price per ounce;
- Sustaining capital expenditures of $31.8 million invested in mining equipment and development;
- AISC increased 8.4% to $1,349 per ounce, compared to $1,244 for FY2018 due to a 14% increase in sustaining capital;
- Operating cash flow increased 15% to $24.4 million; adjusted EBITDA increased 17.5% to $24.3 million.
Vern Baker, President and CEO of Jaguar Mining stated: "During Q4 2019, we continued to improve our production numbers and closed out the year with our best quarter. We are moving forward over time, building a sustainable production platform of 25,000 ounces per quarter. The improvement is reflected in a positive free cash flow for the first quarter since the end of 2017. With the completion of our financial hedges this year, the current trend of gold price, our improving production, and our decreasing AISC, we expect to see consistently stronger financials each quarter this year. In Q4 2019, we were able to clear our debt with Auramet, removing the biggest limiting factor i.e. hedges on our realized gold price. We also delivered on a large portion of our option contracts in 2019 and started 2020 with only 6,700 ounces at $1,363 per ounce in option instruments. Those options were cleared in February 2020, and the company is completely unhedged now.
"Turmalina Gold Mine continues advancing in production and the development of a sustainable operation. While Turmalina finished the full year with only 33,401 ounces, Q4 was the strongest quarter of the year for this mine with 9,773 ounces produced. The Pilar Gold Mine has shown consistent improvement over the past 3 years. In that time frame, Pilar has increased its annual ounce production from 27,000 in 2016 to 41,000 in 2019 and is positioned to produce up to 50,000 in the near future. Our mines continue to improve their production profile with new production areas coming into the sequence, and we expect to see our production continue to improve on a quarterly basis."
FY 2019 and Q4 2019 Financial Results
| ($ thousands, except where indicated) | Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
| Financial Data | |||||||||||||||||||
| Revenue | $ | 28,895 | $ | 21,377 | $ | 97,234 | $ | 94,918 | |||||||||||
| Operating costs | 16,433 | 14,014 | 59,585 | 54,581 | |||||||||||||||
| Depreciation | 3,909 | 4,997 | 14,443 | 19,208 | |||||||||||||||
| Gross profit | 8,553 | 2,366 | 23,206 | 21,129 | |||||||||||||||
| Net income (loss) | 2,687 | (15,065 | ) | (148) | (15,968 | ) | |||||||||||||
| Per share ("EPS") | 0.00 | (0.05 | ) | (0.00) | (0.05 | ) | |||||||||||||
| EBITDA1 | 8,001 | (9,189 | ) | 18,763 | 7,122 | ||||||||||||||
| Adjusted EBITDA1,2 | 8,781 | 2,833 | 24,333 | 20,716 | |||||||||||||||
| Adjusted EBITDA per share1 | 0.01 | 0.01 | 0.03 | 0.06 | |||||||||||||||
| Cash operating costs (per ounce sold)1 | 780 | 795 | 806 | 732 | |||||||||||||||
| All-in sustaining costs (per ounce sold)1 | 1,239 | 1,279 | 1,349 | 1,244 | |||||||||||||||
| Average realized gold price (per ounce)?? | 1,372 | 1,213 | 1,316 | 1,274 | |||||||||||||||
| Cash generated from operating activities | 9,664 | 5,180 | 24,366 | 21,183 | |||||||||||||||
| Free cash flow1 | 1,188 | (1,347 | ) | (7,443) | (6,836 | ) | |||||||||||||
| Free cash flow (per ounce sold)1 | 56 | (76 | ) | (101) | (92 | ) | |||||||||||||
| Sustaining capital expenditures1 | 8,476 | 6,527 | 31,809 | 28,019 | |||||||||||||||
| Non-sustaining capital expenditures1 | 1,081 | 302 | 2,289 | 2,544 | |||||||||||||||
| Total capital expenditures | 9,557 | 6,829 | 34,098 | 30,563 | |||||||||||||||
| 1 Average realized gold price, sustaining and non-sustaining capital expenditures, cash operating costs and all-in sustaining costs, adjusted operating cash flow, free cash flow, EBITDA and adjusted EBITDA, and adjusted EBITDA per share are non-IFRS financial performance measures with no standard definition under IFRS. Refer to the Non-IFRS Financial Performance Measures section of the MD&A. | |||||||||||||||||||
| 2 Adjusted EBITDA excludes non-cash items such as impairment and write downs. For more details refer to the Non-IFRS Performance Measures section of the MD&A. | |||||||||||||||||||
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Operating Data | ||||||||||||||||
| Gold produced (ounces) | 20,029 | 17,044 | 74,084 | 75,048 | ||||||||||||
| Gold sold (ounces) | 21,060 | 17,622 | 73,896 | 74,530 | ||||||||||||
| Primary development (metres) | 1,453 | 777 | 5,440 | 4,455 | ||||||||||||
| Secondary development (metres) | 825 | 719 | 3,166 | 2,471 | ||||||||||||
| Definition, infill, and exploration drilling (metres) | 12,197 | 12,292 | 34,899 | 42,315 | ||||||||||||
Cash Position and Use of Funds
- Cash and unsold bullion balance of $11.7 million, as compared to $12.1 million of cash and unsold bullion on September 30, 2019;
- The repayment of the Auramet loan provides more liquidity to the balance sheet and cash flow for 2020; the Company's remaining debt of $4.5 million is now comprised of a number of short-term loans from Brazilian banks
- As at December 31, 2019, working capital was $9.4 million, compared to a $2.4 million deficit as at December 31, 2018.
Annual Information Form
In accordance with section 6.2 of NI 51-102, the Company's Annual Information Form ("AIF") is due to be filed on the 90th day after December 31, 2019, the end of the Company's most recently completed financial year. Due to the business restrictions and operational challenges resulting from the outbreak of the COVID-19 pandemic (including accommodating the work schedules of the Company's external advisors and consultants), the Company will file its 2019 AIF at its earliest opportunity, which is expected to occur in late-April 2020. However, pursuant to Ontario Instrument 51-502 "Temporary Exemption from Certain Corporate Finance Requirements", the OSC has provided a conditional 45-day extension for filing certain continuous disclosure documents, including an AIF, by reporting issuers in Ontario. Securities regulators in other Canadian provinces have issued corresponding exemption orders.
Although the Company currently has no material business developments since the date of its last financial statements, other than the business developments that have been disclosed above in this press release and those already disclosed and filed by the Company on SEDAR, the management of the Company and its applicable reporting insiders will be subject to a "blackout period" for any trading by such insiders until the Company files its 2019 AIF on SEDAR. The Company will also file an update news release about the expected filing of its 2019 AIF on or before April 29, 2020. This update news release will include an update about the status of the filing of the Company's 2019 AIF and it will also include an update about of any material business developments since today's date, or confirmation that there have been no material business developments since today's date.
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
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 2019. Additional information is available on the Company's website at www.jaguarmining.com.
For further information please contact:
Vernon Baker
Chief Executive Officer
Jaguar Mining Inc.
vernon.baker@jaguarmining.com
416-847-1854
Hashim Ahmed
Chief Financial Officer
Jaguar Mining Inc.
hashim.ahmed@jaguarmining.com
416-847-1854
Forward-Looking Statements
Certain statements in this news release constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking statements and information are provided for the purpose of providing information about management's expectations and plans relating to the future. All of the forward-looking information made in this news release is qualified by the cautionary statements below and those made in our other filings with the securities regulators in Canada. Forward-looking information contained in forward-looking statements can be identified by the use of words such as "are expected," "is forecast," "is targeted," "approximately," "plans," "anticipates," "projects," "anticipates," "continue," "estimate," "believe" 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. All statements, other than statements of historical fact, may be considered to be or include forward-looking information. This news release contains forward-looking information regarding, among other things, expected sales, production statistics, ore grades, tonnes milled, recovery rates, cash operating costs, definition/delineation drilling, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of projects and new deposits, success of exploration, development and mining activities, currency fluctuations, capital requirements, project studies, mine life extensions, restarting suspended or disrupted operations, continuous improvement initiatives, and resolution of pending litigation. The Company has made numerous assumptions with respect to forward-looking information contained herein, including, among other things, assumptions about the estimated timeline for the development of its mineral properties; the supply and demand for, and the level and volatility of the price of, gold; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource estimates are based; the receipt of necessary permits; market competition; ongoing relations with employees and impacted communities; political and legal developments in any jurisdiction in which the Company operates being consistent with its current expectations including, without limitation, the impact of any potential power rationing, tailings facility regulation, exploration and mine operating licenses and permits being obtained and renewed and/or there being adverse amendments to mining or other laws in Brazil and any changes to general business and economic conditions. Forward-looking information involves a number of known and unknown risks and uncertainties, including among others: the risk of Jaguar not meeting the forecast plans regarding its operations and financial performance; uncertainties with respect to the price of gold, labour disruptions, mechanical failures, increase in costs, environmental compliance and change in environmental legislation and regulation, weather delays and increased costs or production delays due to natural disasters, power disruptions, procurement and delivery of parts and supplies to the operations; uncertainties inherent to capital markets in general (including the sometimes volatile valuation of securities and an uncertain ability to raise new capital) and other risks inherent to the gold exploration, development and production industry, which, if incorrect, may cause actual results to differ materially from those anticipated by the Company and described herein. In addition, there are risks and hazards associated with the business of gold exploration, development, mining and production, including environmental hazards, tailings dam failures, industrial accidents and workplace safety problems, unusual or unexpected geological formations, pressures, cave-ins, flooding, chemical spills, procurement fraud and gold bullion thefts and losses (and the risk of inadequate insurance, or the inability to obtain insurance, to cover these risks). Accordingly, readers should not place undue reliance on forward-looking information.
For additional information with respect to these and other factors and assumptions underlying the forward-looking information made in this news release, see the Company's most recent Annual Information Form and Management's Discussion and Analysis, as well as other public disclosure documents that can be accessed under the issuer profile of "Jaguar Mining Inc." on SEDAR at www.sedar.com. The forward-looking information set forth herein reflects the Company's reasonable expectations as at the date of this news release and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law. The forward-looking information contained in this news release is expressly qualified by this cautionary statement.
Non-IFRS Measures
This news release provides certain financial measures that do not have a standardized meaning prescribed by IFRS. Readers are cautioned to review the below stated footnotes where the Company expands on its use of non-IFRS measures.
- Cash operating costs and cash operating cost per ounce are non-IFRS measures. In the gold mining industry, cash operating costs and cash operating costs per ounce are common performance measures but do not have any standardized meaning. Cash operating costs are derived from amounts included in the Consolidated Statements of Comprehensive Income (Loss) and include mine-site operating costs such as mining, processing and administration, as well as royalty expenses, but exclude depreciation, depletion, share-based payment expenses, and reclamation costs. Cash operating costs per ounce are based on ounces produced and are calculated by dividing cash operating costs by commercial gold ounces produced; US$ cash operating costs per ounce produced are derived from the cash operating costs per ounce produced translated using the average Brazilian Central Bank R$/US$ exchange rate. The Company discloses cash operating costs and cash operating costs per ounce, as it believes those measures provide valuable assistance to investors and analysts in evaluating the Company's operational performance and ability to generate cash flow. The most directly comparable measure prepared in accordance with IFRS is total production costs. A reconciliation of cash operating costs per ounce to total production costs for the most recent reporting period, the quarter ended December 31, 2019, is set out in the Company's fourth quarter 2019 Management Discussion and Analysis (MD&A) filed on SEDAR at www.sedar.com.
- All-in sustaining cost is a non-IFRS measure. This measure is intended to assist readers in evaluating the total costs of producing gold from current operations. While there is no standardized meaning across the industry for this measure, except for non-cash items the Company's definition conforms to the all-in sustaining cost definition as set out by the World Gold Council in its guidance note dated June 27, 2013. The Company defines all-in sustaining cost as the sum of production costs, sustaining capital (capital required to maintain current operations at existing levels), corporate general and administrative expenses, and in-mine exploration expenses. All-in sustaining cost excludes growth capital, reclamation cost accretion related to current operations, interest and other financing costs, and taxes. A reconciliation of all-in sustaining cost to total production costs for the most recent reporting period, the quarter ended December 31, 2019, is set out in the Company's fourth quarter 2019 MD&A filed on SEDAR at www.sedar.com.
SOURCE: Jaguar Mining Inc.
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