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