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August 10, 2011
Jaguar Mining Reports Strong Quarterly Profit, Record Cash Operating Margin in Q2 2011

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.

About Jaguar

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

Company Contacts

Investors and Analysts may contact:
Roger Hendriksen, Vice President,
Investor Relations
603-224-4800
rhendriksen@jaguarmining.com

Members of the media may contact:
Valeria Rezende DioDato, Director of Communication
603-224-4800
valeria@jaguarmining.com
 
 

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