Jaguar Mining Inc. Investor RelationsGo to Home PageInvestor RelationsJaguar Mining Inc.
Jaguar Mining Inc.
Show printable version of 'Jaguar Mining Announces Fourth Quarter and Full Ye...' in a New Window

Investor Relations

News Releases

 
March 21, 2013
Jaguar Mining Announces Fourth Quarter and Full Year 2012 Financial Results and Adoption of Advance Notice By-Law

BELO HORIZONTE, Brazil, Mar 21, 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 $49.4 million or $0.58 per fully diluted share for the quarter ended December 31, 2012. This result compares to a net loss of $33.7 million or $0.40 per fully diluted share in the fourth quarter of 2011. The fourth quarter 2012 result includes an impairment charge of $55.3 million and an $8.5 million unrealized non-cash gain on the conversion option embedded in convertible debt (see note 1). The impairment consists of an additional charge of $42.4 million relating to the Paciência operation, which remains on care and maintenance, and $12.9 million attributable to the Turmalina operation where operating costs have been historically high. Excluding these non-operating items, Jaguar's fourth quarter result was a net loss of $6.9 million or $0.08 per fully diluted share.

For the full year 2012, Jaguar reported a net loss of $84.5 million or $1.00 per fully diluted share. This compares to a net loss of $65.6 million or $0.78 per fully diluted share in the full year 2011. The full year result for 2012 includes an impairment charge of $103.0 million and a $75.5 million unrealized non-cash gain on the conversion option embedded in convertible debt (see note 1). The full year result for 2011 includes a $32.3 million unrealized non-cash loss on the conversion option embedded in convertible debt. Excluding these non-operating items, Jaguar's full year 2012 result was a net loss of $61.4 million or $0.73 per fully diluted share compared to net a net loss of $33.4 million or 0.40 per share in the full year 2011.

During the fourth quarter 2012, Jaguar sold 21,298 ounces of gold at an average realized price of $1,714 per ounce. This compared to sales of 34,157 ounces of gold at an average realized price of $1,680 per ounce in the three months ended December 30, 2011. Average cash operating cost per ounce was $915 in the fourth quarter 2012 compared to $963 in the third quarter 2012 and $1,114 in the fourth quarter 2011. Cash operating margin was $799 per ounce in the fourth quarter 2012 compared to $685 per ounce in the third quarter 2012 and $566 per ounce in the fourth quarter 2011. The decrease in the Company's average cash operating cost per ounce during the fourth quarter 2012 as compared to the fourth quarter 2011 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.

For the full year 2012 Jaguar sold 103,676 ounces at an average realized price of $1,663 per ounce. Average cash operating cost for the year was $1,082 per ounce resulting in an average cash operating margin of $581 per ounce for the year. These figures compared to 155,525 ounces of gold sold at an average realized price of $1,563 per ounce, average cash operating cost per ounce of $870 and average cash operating margin of $693 per ounce in the full year 2011.

Gold production for the quarter ended December 31, 2012 totaled 21,676 ounces and for the full year totaled 102,823 ounces. These production results compare to 33,397 ounces of gold in the fourth quarter of 2011 and 155,764 ounces for the full year 2011. The decline in comparative quarterly and annual 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, "2012 was a challenging year for Jaguar and these results reflect the magnitude of the challenges and the temporary disruptive impact related to the implementation of new mining and ground control methods. Reducing the carrying value of the Paciência and Turmalina operations is a non-cash accounting charge that reflects Paciência remaining on care and maintenance and the high historical operating costs recorded at Turmalina. The reduced book value of these properties does not alter the importance of the properties in the Company's long term future. We have made continual improvement in each of the last three quarters in terms of bringing our operating cash costs down. We believe this is an indication that we are on the right track. Further, preliminary operating results in the first two months of 2013 showed a continuation of this positive trend of lower production cost per ounce."

"The Caeté operation had a very good year meeting production targets and developing a sound production cycle," Petroff continued. "The Turmalina operation is making progress with development now moving out ahead of production and providing some additional operational flexibility. The change in ground control method implemented in 2012 is having the desired effect of improving safety and structural stability in the mines. The temporary negative impact of the implementation has begun to ease as the operations have incorporated the revised program into to the production cycle."

"With a new permanent management team now in place we will continue to focus on and implement continuous improvement at the operations throughout 2013. We are encouraged by our many opportunities as we build and strengthen for the future," Petroff concluded.

Summary of Key Operating Results - Consolidated
                 Three Months Ended Dec 31   Twelve Months Ended Dec 31

               2012          2011          2012          2011

($ in 000s,
except per
share amounts)

Gold sales      $     36,511  $     57,398  $    172,430  $     243,137

Ounces sold           21,298        34,157       103,676        155,525

Average sales
price $ /              1,714         1,680         1,663          1,563
ounce

Gross profit           9,344         1,817         6,143         43,352

Net income          (49,371)      (33,661)      (84,537)       (65,623)
(loss)

Basic income
(loss) per            (0.58)        (0.40)        (1.00)         (0.78)
share

Diluted income
(loss) per            (0.58)        (0.40)        (1.00)         (0.78)
share

Weighted avg.
# of shares       84,409,648    84,409,648    84,409,648     84,386,569
outstanding -
basic

Weighted avg.
# of shares       84,409,648    84,409,648    84,409,648     84,386,569
outstanding -
diluted

Key Operating Statistics by Operation
           Three Months Ended December 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        113  2.64      87%      8,206   $ 74.20    $ 1,057

Paciàªncia          -     -        -          -         -          -

Caeté            172  3.16      88%     13,470     66.30        828

Total            285  2.96      88%     21,676   $ 69.40      $ 915



          Twelve Months Ended December 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        541  2.39      89%     37,840   $ 78.40    $ 1,135

Paciàªncia        170  2.15      90%      9,987     92.30      1,536

Caeté            657  3.13      89%     54,996     79.50        962

Total          1,368  2.72      89%    102,823   $ 80.70    $ 1,082



           Three Months Ended December 31, 2011 Operating Data



              Ore    Feed   Plant   Production   Cash       Cash
           Processed Grade Recovery  (ounces)  Operating Operating
            (t000)   (g/t) Rate (%)             Cost/t   Cost/ounce

Turmalina        181  3.03      87%     13,470   $ 87.50    $ 1,117

Paciàªncia        108  2.63      91%      6,632     81.40      1,307

Caeté            176  3.15      87%     13,295     81.70      1,014

Total            465  2.98      88%     33,397   $ 83.90    $ 1,114



          Twelve Months Ended December 31, 2011 Operating Data



              Ore    Feed   Plant   Production   Cash       Cash
           Processed Grade Recovery  (ounces)  Operating Operating
            (t000)   (g/t) Rate (%)             Cost/t   Cost/ounce

Turmalina        655  3.32      89%     61,400   $ 79.90      $ 886

Paciàªncia        460  2.97      92%     39,581     68.90        787

Caeté            674  3.03      87%     54,783     75.10        912

Total          1,789  3.12      89%    155,764   $ 75.30      $ 870

2013 Outlook

Jaguar expects 2013 gold production in the range of 85,000 to 95,000 ounces. On this planned production volume, 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$2.00 per US$). Capital expenditures for 2013 are anticipated to be approximately $35 million of which $22 million is expected to be spent at Caeté and $13 million at Turmalina. Costs are expected to continue to trend downward throughout 2013 as the planned benefits of the operational improvements and changes in mining methodology implemented in 2012 are realized incrementally throughout the year.

Conference Call Details

Members of the Jaguar senior management team will hold a conference call to discuss the fourth quarter results and operations on Monday, March 25, 2013 at 10:00 a.m. ET. The call can be accessed via telephone or webcast.

Live teleconference access:


US Dial In (Toll Free): 1-866-524-3160

International Dial In: 1-412-317-6760

Live audio webcast: www.jaguarmining.com Replay: US Toll Free: 1-877-344-7529 International Toll: 1-412-317-0088 Conference Number: 10026555

Availability of Annual Financial Statements

Jaguar expects to file its audited financial statements for the year ended December 31, 2012 on March 22, 2013. These financial statements, along with the related notes, can be viewed at the investor relations page of the Company's website at www.jaguarmining.com. A hard copy of the financial statements and the Company's annual report can be obtained free of charge by sending a request via email to ir@jaguarmining.com or by calling 1-647-5JAG (5524).

Advance Notice By-Law

On March 20, 2013, the Board of Directors of Jaguar approved the adoption of an advance notice by-law (the "By-law") which requires advance notice to the Company in circumstances where nominations of persons for election as a director of the Company are made by shareholders other than pursuant to: (i) a requisition of a meeting made pursuant to the provisions of the Business Corporations Act (Ontario) (the "Act"); or (ii) a shareholder proposal made pursuant to the provisions of the Act.

Among other things, the By-law fixes a deadline by which shareholders must submit a notice of director nominations to the Company prior to any annual or special meeting of shareholders where directors are to be elected and sets forth the information that a shareholder must include in the notice for it to be valid.

In the case of an annual meeting of shareholders, notice to the Company must be made not less than 30 nor more than 65 days prior to the date of the annual meeting; provided, however, that in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10th day following such public announcement.

In the case of a special meeting of shareholders (which is not also an annual meeting), notice to the Company must be made not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting was made.

The By-law is effective as at the date of approval by the Board. At the next meeting of shareholders, shareholders will be asked to confirm and ratify the By-law and if the By-law is not confirmed at the meeting by ordinary resolution of shareholders, the By-law will terminate and be of no further force and effect following the termination of the meeting.

The Company believes that adopting the By-law is considered to be good corporate governance. The By-law facilitates an orderly and efficient annual or special meeting process and it ensures that all shareholders receive adequate notice of director nominations with sufficient information with respect to all nominees. This allows the Corporation and its shareholders to evaluate the proposed nominees' qualifications and suitability as directors, which further allows shareholders to cast an informed vote for the election of directors.

The full text of the By-Law will be available via SEDAR at www.sedar.com.

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 will be 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 December 31, 2012.

The following tables contain information for the quarter (unaudited) and year ended December 31, 2012. The data presented are subject to final adjustment, but are believed to be materially accurate. Jaguar's audited financial statements for the period ended December 31, 2012 are were filed on SEDAR and EDGAR on March 20, 2013. Readers should refer to those filings for the final audited financial statements and the associated footnotes which are an integral part of the tables.

JAGUAR MINING INC.



Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars)



                                           December 31,   December 31,
                                                   2012           2011





Assets

Current assets:

  Cash and cash equivalents               $      13,856  $      74,475

  Inventory                                      26,342         34,060

  Prepaid expenses and sundry assets             20,069         25,541

  Derivatives                                        43              -

                                                 60,310        134,076



  Prepaid expenses and sundry assets             56,886         48,068

  Restricted cash                                   609            909

  Assets available for sale                         612              -

  Property, plant and equipment                 301,383        388,675

  Mineral exploration projects                   84,075         88,938

                                             $  503,875     $  660,666



Liabilities and Shareholders' Equity

Current liabilities:

  Accounts payable and accrued              $    29,745    $    34,922
  liabilities

  Notes payable                                  27,388         22,517

  Income taxes payable                           15,451         18,953

  Reclamation provisions                          4,124          2,082

  Other provisions                                4,796          4,347

  Deferred compensation liabilities                 105          2,953

  Other liabilities                                  20          1,475

                                                 81,629         87,249



  Notes payable                                 240,158        228,938

  Option component of convertible notes           4,458         79,931

  Deferred income taxes                           6,624          8,635

  Reclamation provisions                         16,927         15,495

  Deferred compensation liabilities                 216          2,270

  Other liabilities                                  60            339

  Total liabilities                             350,072        422,857



Shareholders' equity:

  Share capital                                 370,043        370,043

  Stock options                                   2,137         14,207

  Contributed surplus                            16,015          3,414

  Deficit                                     (234,392)      (149,855)

  Total equity attributable to equity           153,803        237,809
  shareholders of the Company



                                           $    503,875   $    660,666





JAGUAR MINING INC.



Consolidated Statements of Operations and Comprehensive Loss

(Expressed in thousands of U.S. dollars, except share
and per share amounts)



                                             Year Ended    Year Ended
                                           December 31,   December 31,
                                                   2012           2011





Gold sales                                 $    172,430    $   243,137

Production costs                              (127,851)      (153,331)

Stock-based compensation                            457          (347)

Depletion and amortization                     (38,893)       (46,107)

Gross profit                                      6,143         43,352



Operating expenses:

  Exploration                                       700          1,953

  Paciàªncia shut down & care and                  4,350              -
  maintenance

  Stock-based compensation (recovery)           (1,864)          2,970

  Administration                                 18,886         25,506

  Management fees                                    30          3,016

  Amortization                                    1,168          1,249

  Other                                           3,595          2,596

  Total operating expenses                       26,865         37,290



Income (loss) before the following             (20,722)          6,062



Loss (gain) on derivatives                        (720)            420

Loss (gain) on conversion option               (75,473)         32,250
embedded in convertible debt

Foreign exchange loss                             5,882          8,480

Accretion expense                                 3,585          2,454

Interest expense                                 28,511         27,001

Interest income                                 (3,168)        (9,237)

Loss (gain) on disposition of property            2,805        (2,029)

Impairment of properties                        102,997              -

Other non-operating expense                       1,164            453

Total other expenses                             65,583         59,792



Loss before income taxes                       (86,305)       (53,730)

Income taxes

  Current income taxes (recoveries)               (466)          3,450

  Deferred income taxes (recoveries)            (1,302)          8,443

Total income taxes                              (1,768)         11,893



Net loss and comprehensive loss for the    $   (84,537)   $   (65,623)
year





Basic and diluted loss per share          $      (1.00)  $      (0.78)



Weighted average number of common shares     84,409,648     84,386,569
outstanding - basic and diluted





JAGUAR MINING INC.



Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)



                                                Year Ended   Year Ended
                                              December 31, December 31,
                                                      2012         2011





Cash provided by (used in):

  Operating activities:

    Net loss and comprehensive income           $ (84,537)   $ (65,623)
    (loss) for the year

    Adjustments to reconcile net earnings
    to net cash provided from

    (used in) operating activities:

      Unrealized foreign exchange (gain)           (4,184)       11,618
    loss

      Stock-based compensation expense             (2,321)        3,317
    (recovery)

      Interest expense                              28,511       27,001

      Accretion of interest income                       -        (188)

      Accretion expense                              3,585        2,454

      Deferred income taxes (recovery)             (1,302)        8,443

      Depletion and amortization                    40,061       47,356

      Impairment of properties                     102,997            -

      Write-down of Paciàªncia inventory              1,825        2,242

      Unrealized (gain) loss on derivatives           (43)          168

      Unrealized loss (gain) on option            (75,473)       32,250
    component of convertible note

      Provision and loss on disposition of           4,460        1,618
    PPE

      Impairment mineral exploration                     -          528
    projects

    Reclamation expenditures                         (298)        (556)

    Current income tax paid                              -        (140)

                                                    13,281       70,488

Change in non-cash operating working
capital:

      Inventory                                      7,146          286

      Prepaid expenses and sundry assets          (12,183)      (8,845)

      Accounts payable and accrued                 (5,597)        8,419
    liabilities

      Income taxes payable                         (3,502)        2,416

      Other provisions                                 449        1,725

      Deferred compensation liabilities            (2,383)      (2,570)

                                                   (2,789)       71,919

Financing activities:

      Issuance of common shares                          -          164

      Decrease in restricted cash                      300            -

      Repayment of debt                           (20,703)     (24,163)

      Increase in debt                              23,200      115,313

      Interest paid                               (14,370)     (13,276)

      Other liabilities                            (1,733)          613

                                                  (13,306)       78,651

Investing activities:

      Mineral exploration projects                 (8,554)     (15,723)

      Purchase of property, plant and             (44,263)     (95,107)
    equipment

      Proceeds from disposition of                   1,556          365
    property, plant and equipment

                                                  (51,261)    (110,465)



Effect of foreign exchange on non-U.S.
dollar denominated

    cash and cash equivalents                        6,737      (4,853)

Increase (decrease) in cash and cash              (60,619)       35,252
equivalents

Cash and cash equivalents, beginning of             74,475       39,223
year

Cash and cash equivalents, end of year            $ 13,856     $ 74,475

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 $4.5 million at December 31, 2012 (December 31, 2011 - $79.9 million). The change in fair value of $75.5 million for the year ended December 31, 2012 is shown as a gain on conversion option embedded in convertible debt in the statements of operations and comprehensive loss (December 31, 2011 - $32.3 million loss).


Company Contacts

Roger Hendriksen, Vice President, Investor Relations
603-410-4888
rhendriksen@jaguarmining.com

Valeria Rezende, DioDato Director of Communication
011-55-31-4042-1249
valeria@jaguarmining.com
 
 

You can view the Next News Releases item: Fri Mar 22, 2013, Jaguar Mining Announces the Availability of 2012 Audited Financial Statements

You can view the Previous News Releases item: Fri Jan 25, 2013, Jaguar Mining Inc. Draws Down $5 Million Under Renvest Credit Facility

You can return to the main News Releases page, or press the Back button on your browser.

Jaguar Mining Inc.
Jaguar Mining Inc.Jaguar Mining Inc.