Jaguar Mining Reports Q4 and FY 2010 Earnings
CONCORD, NH, March 21 /CNW/ --
JAG - TSX/NYSE
CONCORD, NH, March 21 /CNW/ - Jaguar Mining Inc. ('Jaguar' or the 'Company') (JAG: TSX/NYSE) reports its financial and operational results for the period ended
December 31, 2010. The Company is also providing the date it intends to
issue its preliminary Q1 2011 operating results and progress within
this release. All figures are in U.S. dollars unless otherwise
indicated.
FY 2010 Highlights
-- Revenue of $170.8 million, an increase of 21% over 2009.
-- Net loss of $23.8 million or ($0.28) per basic and fully
diluted share for the year ended December 31, 2010 compared to
a net loss of $8 million or ($0.10) per basic and fully diluted
share for the same period in 2009. Adjusted net loss,
excluding special non-operating and non-recurring charges,
totaled $12.2 million or ($0.15) per share (See Non-GAAP
Performance Measures).
-- Gross profit of $12.4 million, a decrease of 71% from 2009,
largely due to higher operating costs caused by the stronger
Brazilian real and geo-mechanical operational issues at
Jaguar's Turmalina mining operation.
-- Gold production of 137,867 ounces at an average cash operating
cost of $732 per ounce compared to 148,742 ounces at an average
cash operating cost of $462 per ounce during 2009 (see Non-GAAP
Performance Measures). The primary reason for the decline in
production was primarily attributable to the geo-mechanical
problems at the Turmalina Mine during the second half of 2010.
The Sabará operation has been excluded from the 2009 figures as
it was placed on long-term care and maintenance during the
second half of 2009.
-- Cash generated by operating activities totaled $19.6 million, a
decrease of 39% from 2009.
-- Investments of $131.9 million in growth projects, an increase
of 54% from 2009.
-- As of December 31, 2010, the Company held cash, cash
equivalents and short-term investments of approximately $39.2
million. On February 9, 2011, the Company closed a $103.5
million private offering of convertible notes that increased
its cash and short term investments to $119.5 million as of
February 28, 2011.
-- Achieved underground development targets by completing 18.8
kilometers of development.
-- Commissioned the Caeté operation, Jaguar's third integrated
mining-processing facility.
Q4 2010 Highlights
-- Revenue of $44.6 million, an increase of 13% over 2009.
-- Net loss of $9.5 million or ($0.11) per basic and fully diluted
share compared to a net loss of $29.4 million or ($0.36) per
basic and fully diluted share in Q4 2009. Adjusted net loss,
excluding special non-operating and non-recurring charges,
totaled $6.4 million or ($0.08) per basic and fully diluted
share compared to a Q4 2009 adjusted net loss of $3.7 million
or ($0.05) per basic and fully diluted share in Q4 2009. (See
Non-GAAP Performance Measures).
-- Gross profit of $2.8 million, a decrease of 73% from Q4 2009.
-- Gold production of 34,682 ounces at an average cash operating
cost of $762 per ounce compared to 39,891 ounces at an average
cash operating cost of $539 per ounce in Q4 2009 (see Non-GAAP
Performance Measures). The decrease in production from the
prior year was largely attributable to management's decision to
halt ore production in the Turmalina Ore Body A due to
geo-mechanical issues during the quarter and divert efforts to
forward development.
-- Cash generated by operating activities totaled $24,000, a
decrease of 98% from Q4 2009. Cash flow from operations,
excluding changes in non-cash operating working capital,
totaled approximately $3 million in Q4 2010 (see Non-GAAP
Performance Measures).
-- Investments of $22.6 million in growth projects in Q4 2010, a
decrease of 31% from Q4 2009.
Commenting on the 2010 performance, Daniel R. Titcomb, Jaguar's
President and CEO stated, 'We faced a challenging year at our Turmalina
and Paciência operations where both production and cash operating costs
were adversely affected. Over the past eight months, our operating
teams have worked diligently to improve these operations into
healthier, more productive and sustainable mines. Turmalina required a
change in the mining method, which we completed in early-2011. At each
of our underground mines we have significantly increased the backfill
systems and development of the infrastructure, adding more stopes and
faces which adds to our flexibility. Through this effort, we now have
between 10 and 18 months of fully developed reserves, ready for mining
to support our 2011 production target. Our progress is in part tied to
recent management changes implemented in the operations. We expect
significant improvements as we move through 2011. As important, the
successful commissioning of our new Caeté operation, the third such
integrated mining complex we have built, should represent a significant
source of gold production and a platform for further growth for years
to come.'
Summary of Key Operating Results
The following is a summary of key operating results.
Three Months Ended Year Ended
December 31 December 31
2010 2009 2010 2009
(unaudited)
($ in 000s,
except per
share
amounts)
Gold sales $ $ 39,497 $ 170,788 $ 140,734
44,554
Ounces sold 140,530 143,698
34,134 35,944
Average
sales price 1,306 1,099 1,215 979
$ / ounce
Gross 12,420 42,583
profit 2,777 10,363
Net income (9,474) (23,792) (7,992)
(loss) (29,381)
Basic income
(loss) per (0.11) (0.36) (0.28) (0.10)
share
Diluted
income
(loss) per (0.11) (0.36) (0.28) (0.10)
share
Weighted
avg. # of
shares 84,259,191 80,738,919 84,152,914 76,410,916
outstanding
- basic
Weighted
avg. # of
shares 84,259,191 80,738,919 84,152,914 76,410,916
outstanding
- diluted
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 year ended December 31, 2010.
Q1 2011 Update of Operations
The Company intends to provide an update of its preliminary Q1 2011
operating results on Tuesday, April 19, 2011. In aggregate, the Company
expects to produce between 38,000 and 40,000 ounces of gold for the
quarter ending March 31, 2011. The first quarter results are
consistent with the initiatives the Company implemented during the
second half of 2010 and its 2011 target of between 195,000 and 205,000
ounces.
Non-GAAP Performance Measures
The Company has included the non-GAAP performance measures discussed
below in this press release. These non-GAAP performance measures do
not have any standardized meaning prescribed by Canadian GAAP ('GAAP')
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 GAAP, these non-GAAP
measures provide investors with additional information that will better
enable them to evaluate the Company's performance. Accordingly, these
Non-GAAP measures are intended to provide additional information and
should not be considered in isolation or as a substitute for measures
of performance prepared with GAAP.
The Company has included cash operating cost per tonne processed, cash
operating cost per ounce produced and cash operating margin per ounce
because it believes these figures are a useful indicator of a mine'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 mines. 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-GAAP measures to reported GAAP measures are
set out in the following tables.
Adjusted Net Loss
A Non-GAAP Measure
($000s except per share
amounts)
Three Months
Ended Year Ended
December 31, 2010 December 31, 2010
Net (loss) as reported $ (9,474) $ (23,792)
Adjustments:
Non-cash interest expense 2,074 8,098
Additional depletion on - 1,800
unconverted resources
Loss on forward 686 686
derivatives
Loss on sale of Sabará - 677
inventory
Write-down of Sabará 313 313
operation
Adjusted net income $ (6,401) $ (12,218)
(loss)
Adjusted EPS $ (0.08) $ (0.15)
Cash Flow From
Operations
Non GAAP Measure
Three Months
$ in thousands (except Ended Year Ended
per share amounts) December 31, 2010 December 31, 2010
Cash provided by
operating activities as
reported
Net income (loss) $ (9,474) $ (23,792)
Items not involving
cash:
Unrealized foreign (203) (151)
exchange (gain) loss
Stock-based 1,109 (1,571)
compensation
Non-cash interest 2,074 8,098
expense
Accretion expense 520 1,697
Future income taxes (981) 172
Depletion and 10,746 39,322
amortization
Write down on Sabara 313 313
property
Unrealized (gain)
loss on forward sales (1,502) -
derivatives
Unrealized (gain)
loss on foreign
exchange contracts 509 1,111
Disposition of - (4,625)
property
Accretion of (94) (188)
interest revenue
Reclamation expenditure (51) (1,662)
Cash provided by
operating activities
before change in non
cash operating working
capital 2,966 18,724
Cash provided by
operating activities $ 0.04 $ 0.22
per share
Cash Operating Margin per Three Months
oz of gold Ended Year Ended
December 31, 2010 December 31, 2010
Average sales price per $ 1,306 $ 1,215
oz of gold
less
Cash operating cost per 762 732
oz of gold produced
equals
Cash operating margin per $ 544 $ 483
oz of gold
The following tables set forth certain operating data for Turmalina,
Paciência and Caeté for the three and twelve months ended December 31,
2010 and 2009.
Quarter Ended December 31, 2010 Operating Data
Ore Feed Plant Cash Cash
Processed grade Recovery Production Operating Operating
(t 000) (g/t) rate (ounces) cost/t cost/ounce
Turmalina 88% 10,275 $ 66.70 $ 899
143 2.89
Paciência 94% 13,808
135 3.57 61.80 628
Caeté 88% 10,599
156 2.84 63.40 804
Total 92% 34,682 $ 64.00 $ 762
434 3.09
Year Ended December 31, 2010 Operating Data
Ore Feed Plant Cash Cash
Processed grade Recovery Production Operating Operating
(t 000) (g/t) rate (ounces) cost/t cost/ounce
Turmalina 87% 59,481 $ 64.50 $ 774
692 3.20
Paciência 93% 59,287
626 3.32 60.90 670
Caeté 91% 19,099
258 2.85 63.10 792
Total 90% 137,867 $ 62.80 $ 732
1,576 3.19
Quarter Ended December 31, 2009 Operating Data
Ore Feed Plant Cash Cash
Processed grade Recovery Production Operating Operating
(t 000) (g/t) rate (ounces) cost/t cost/ounce
Turmalina 89% 21,184 $ 63.00 $ 523
179 3.93
Paciência 93% 18,707
178 3.41 59.30 556
Caeté
- - - - - -
Total 91% 39,891 $ 61.20 $ 539
357 3.67
Year Ended December 31, 2009 Operating Data
Ore Feed Plant Cash Cash
Processed grade Recovery Production Operating Operating
(t 000) (g/t) rate (ounces) cost/t cost/ounce
Turmalina 89% 82,071 $ 59.60 $ 424
588 4.81
Paciência 93% 66,671
646 3.42 51.20 502
Caeté
- - - - - -
Total 91% 148,742 $ 55.50 $ 462
1,234 4.14
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.
Consolidated Balance
Sheet
(Expressed in thousands
of U.S. dollars)
December 31, December 31,
2010 2009
Assets
Current assets:
Cash and cash $ 39,223 $ 121,256
equivalents
Inventory 31,495 36,986
Prepaid expenses and 24,523 19,050
sundry assets
Unrealized foreign 168 1,280
exchange gains
95,409 178,572
Prepaid expenses and 48,582 35,837
sundry assets
Net smelter royalty 1,006 1,006
Restricted cash 908 108
Property, plant and 343,363 205,329
equipment
Mineral exploration 90,008 129,743
projects
$ 579,276 $ 550,595
Liabilities and
Shareholders' Equity
Current liabilities:
Accounts payable and $ 27,853 $ 22,892
accrued liabilities
Notes payable 26,130 5,366
Income taxes payable 16,677 15,641
Asset retirement 2,167 510
obligations
Deferred compensation 2,436 -
liability
Other liabilities 704 -
75,967 44,409
Notes payable 141,766 126,784
Future income taxes 12,558 11,821
Asset retirement 19,462 12,331
obligations
Deferred compensation 3,816 8,616
liability
Other liabilities 497 738
Total liabilities 254,066 204,699
Shareholders' equity
Common shares 369,747 365,667
Stock options 13,054 14,762
Contributed surplus 42,762 42,028
Deficit (100,353) (76,561)
325,210 345,896
Commitments
Subsequent events
$ 579,276 $ 550,595
JAGUAR MINING
INC.
Consolidated Statements of Operations and Comprehensive Loss
(Expressed in thousands of U.S. dollars, except per share amounts)
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2010 2009 2008
Gold sales $ 170,788 $ 140,734 $ 93,657
Production costs (119,124) (74,287) (53,610)
Stock-based
compensation (482) (600) (24)
Depletion and (38,762) (23,264) (12,669)
amortization
Gross profit 12,420 42,583 27,354
Operating
expenses:
Exploration 3,553 3,079 3,536
Stock-based (2,053) 10,644 1,238
compensation
Administration 20,600 16,411 12,571
Management 1,131 1,604 854
fees
Amortization 560 452 264
Accretion 1,697 786 490
expense
Other 5,051 2,440 379
Total
operating 30,539 35,416 19,332
expenses
Income (loss)
before the (18,119) 7,167 8,022
following
Loss on forward 686 318
derivatives -
Loss (gain) on
forward foreign
exchange
derivatives (1,391) (2,642) 2,623
Foreign exchange (1,697) (17,307) (2,477)
gain
Interest expense 16,638 28,847 11,584
Interest income (3,870) (4,203) (3,850)
Gain on
disposition of (6,794) (2,043) (452)
property
Write down on 313 3,522
Sabará property -
Other
non-operating - 145 -
expenses
Total other 3,885 6,319 7,746
expenses
Income (loss)
before income (22,004) 848 276
taxes
Income taxes
Current income 1,616 4,979 6,172
taxes
Future income
taxes 172 3,861 (1,640)
(recovered)
Total income 1,788 8,840 4,532
taxes
Net loss and
comprehensive (23,792) (7,992) (4,256)
loss for the
year
JAGUAR MINING INC.
Consolidated
Statements of Cash
Flows
(Expressed in
thousands of U.S.
dollars)
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2010 2009 2008
Cash provided by
(used in):
Operating
activities:
Net loss and
comprehensive $ (23,792) $ (7,992) $ (4,256)
loss for the
year
Items not
involving
cash:
Unrealized
foreign (151) (3,227) (3,471)
exchange
gain
Stock-based (1,571) 7,962 1,262
compensation
Non-cash
interest 8,098 15,320 1,982
expense
Accretion of
interest (188) - -
revenue
Accretion 1,697 786 490
expense
Future
income taxes 172 3,861 (1,640)
(recovered)
Depletion
and 39,322 23,716 12,933
amortization
Write down
on Sabará 313 3,522 -
property
Amortization
of net 219
smelter - -
royalty
Unrealized
loss (gain)
on foreign 1,111 (3,701) 4,102
exchange
contracts
Gain on
disposition (4,625) - -
of property
Reclamation (1,662) (328)
expenditure -
Change in
non-cash
operating
working capital
Inventory 8,064 (11,106) (4,361)
Prepaid
expenses and (12,607) (13,612) (14,200)
sundry
assets
Accounts
payable and 4,960 9,707 423
accrued
liabilities
Current
taxes 1,036 7,015 5,107
payable
Deferred
compensation (546) - -
liabilities
19,631 31,923 (1,410)
Financing
activities:
Issuance of
common shares,
special
warrants
and warrants,
net 2,895 114,294 105,803
Shares
purchased for - - (6,381)
cancellation
Settlement of
forward - - (14,500)
derivatives
Decrease
(increase) in (800) 2,998
restricted (4)
cash
Repayment of (4,158) (84,614) (18,654)
debt
Increase in 31,099 118,204 3,848
debt
Other long
term 463 738 -
liabilities
29,499 151,620 70,112
Investing
activities
Mineral
exploration (29,275) (25,200) (37,087)
projects
Purchase of
property, (102,089) (60,300) (52,210)
plant and
equipment
Proceeds from
disposition of 1,250 - -
property
(130,114) (85,500) (89,297)
Effect of foreign
exchange on
non-U.S. dollar (1,049) 2,653 (4,556)
denominated
cash and cash
equivalents
Increase
(decrease) in cash (82,033) 100,696 (25,151)
and cash
equivalents
Cash and cash
equivalents, 121,256 20,560 45,711
beginning of year
Cash and cash
equivalents, end $ 39,223 $ 121,256 $ 20,560
of year
Conference Call Details
The Company will hold a conference call tomorrow, March 22 at 10:00 a.m.
EDT, to discuss the results.
From North
America: 800-392-9307
International: 213-416-2192
Replay:
From North 800-675-9924
America: 213-416-2185
International: 32211
Replay ID: www.jaguarmining.com
Webcast:
A presentation will be available prior to the call on the Company's
homepage at www.jaguarmining.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 is developing the
Gurupi Project in northern Brazil 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 a forward-looking statement, within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995
and applicable Canadian securities laws, concerning the Company's
belief that Caeté should represent a significant source of gold
production for years to come. 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 information,
there may be other factors that cause actions, events or results to
differ from those anticipated, estimated or intended.
This forward-looking statements represents 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.
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| Investors and analysts: Bob Zwerneman Vice President Corporate Development and Director of Investor Relations 603-224-4800 bobz@jaguarmining.com | | | Media inquiries: Valéria Rezende DioDato Director of Communication 603-224-4800 valeria@jaguarmining.com |