Jaguar Mining Reports Q1 2010 Earnings

Adj. Net Income of ($0.01)/share, Adj. Cash Flow of $0.13/share

JAG - TSX/NYSE

CONCORD, NH, May 11 /CNW/ - Jaguar Mining Inc. ("Jaguar" or the "Company") (JAG: TSX/NYSE) reports its financial and operational results for the period ended March 31, 2010. All figures are in U.S. dollars unless otherwise indicated.

Q1 2010 Highlights

    
    -   Q1 2010 adjusted net loss of $1.1 million or ($0.01) per basic and
        fully diluted share compared to an adjusted net gain of $6.2 million
        or $0.09 per basic and fully diluted share in Q1 2009. (See Non-GAAP
        Performance Measures.) Adjusted net income decreased from the prior
        period primarily due to the strengthening of the Brazilian real
        ("R$"), which increased 29% from the year before. Lower grades at the
        Turmalina operation, coupled with items noted below, also contributed
        to the lower adjusted net income.

        The adjusted net loss excludes two significant items: (a) non-cash
        interest expense associated with Jaguar's 4.5% Senior Convertible
        Notes issued in September 2010 totaling $2.0 million, which is
        required to be recognized under Generally Accepted Accounting
        Principles in Canada ("GAAP") to reflect the value of the conversion
        option afforded to note holders separate from the value of the bond
        and (b) other (non-recurring) cost of goods sold in the amount of
        $1.5 million, approximately one-half of which was related to
        additional charges to place the Sabara operation on long-term idle
        status. The Company's reported earnings were further impacted by:

           1. the distribution of fixed overhead and idle plant charges
              resulting from reduced production, in-part stemming from 10-day
              scheduled maintenance shutdowns at Turmalina and Paciencia
              plants,

           2. charges for development costs related to non-converted
              resources (into reserves) and,

           3. expenditures to adopt forthcoming International Financial
              Reporting Standards.

    -   Q1 2010 adjusted cash flow of $11.2 million or $0.13 per basic and
        fully diluted share compared to $6.0 million or $0.09 per basic and
        fully diluted share in Q1 2009. (See Non-GAAP Performance Measures.)
        The adjusted cash flow figure takes into account non-cash changes in
        working capital of approximately $4.5 million in Q1 2010 and
        ($0.8) million in Q1 2009.

    -   Q1 2010 net loss of $4.6 million or ($0.05) per basic and fully
        diluted share compared to a net gain of $4.8 million or $0.07 per
        basic and fully diluted share in Q1 2009.

    -   Q1 2010 cash flow of $6.8 million compared to $6.7 million in Q1
        2009.

    -   Q1 2010 gold sales rose to 36,888 ounces at an average price of
        $1,102 per ounce yielding revenue of $40.7 million compared to Q1
        2009 gold sales of 35,879 ounces at an average price of $928 per
        ounce and revenue of $33.3 million. This represents a 22% increase in
        gold sales revenue and a 3% increase in the number of ounces sold.

    -   Q1 2010 gold production totaled 31,223 ounces at an average cash
        operating cost of $597 per ounce compared to 32,868 ounces at an
        average cash operating cost of $409 per ounce during the same period
        last year, a decrease of 5% in gold production (see Non-GAAP
        Performance Measures). Beginning in Q1 2010, the Company adopted a
        definition of "to the refinery" for measuring gold production. As a
        result of this change, the Q1 2010 production figure does not include
        gold in-process or in unfinished inventory as was the case for
        quarterly production data prior to Q1 2010.

    -   Q1 2010 gross profit decreased to $7.4 million from $11.2 million in
        Q1 2009, a decrease of 34% caused primarily by a significantly
        stronger R$.

    -   Jaguar invested $36.9 million in growth projects in Q1 2010, up
        significantly from the $5.6 million invested in Q1 2009 when the
        Company implemented substantial investing curbs in response to the
        global financial crisis.

    -   As of March 31, 2010 the Company held cash, cash equivalents and
        short-term investments of approximately $100.9 million as compared to
        $84.7 million as of March 31, 2009.
    

Caeté Project Update:

The Company has initiated partial commissioning of its new Caeté processing complex with the successful start of the crushing circuit. Over the next two weeks it is expected the milling, flotation and leaching circuits will be charged and full commissioning will commence. The Caeté Project was completed within the budget and schedule, 13 months from the start of construction. Management anticipates the plant should reach commercial production status by Q4 2010.

Commenting on the Q1 2010 results, Daniel R. Titcomb, Jaguar's President and CEO stated, "Our 2010 targets for production and costs remain largely unchanged and take into account the impact of the first quarter performance. With Caeté now entering the commissioning phase, along with operating refinements initiated at the Turmalina and Paciencia operations, we are confident our production, revenue and cash flow will trend significantly higher through the end of the year, given the status of projects and current gold prices."

Summary of Key Operating Results

The following is a summary of key operating results:

    
                                                       Three Months Ended
                                                            March 31
                                                 ----------------------------
                                                       2010          2009
                                                 ----------------------------
    (unaudited)
    ($ in 000s, except per share
     and per ounce amounts)
    Gold sales                                    $     40,670  $     33,285
    Ounces sold                                         36,888        35,879
    Average sales price $/ounce                          1,102           928
    Gross profit                                         7,370        11,292
    Net income (loss)                                   (4,605)        4,758
    Basic income (loss) per share                        (0.05)         0.07
    Diluted income (loss) per share                      (0.05)         0.07
    Weighted avg. No. of shares outstanding
     - basic                                        83,995,337    68,621,449
    Weighted avg. No. of shares outstanding
     - diluted                                      83,995,337    69,779,608
    

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 Interim Consolidated Financial Statements for the period ended March 31, 2010.

2010 Outlook

The Company's production and cash operating cost estimates for 2010 are shown below. Estimated cash operating costs are based on R$1.75 per $1.00.

    
    -------------------------------------------------------------------------
                                            Estimated              Estimated
    Operation                                    2010                FY 2010
                                           Production    Cash Operating Cost
                                                  (oz)                 ($/oz)
    -------------------------------------------------------------------------
    Turmalina                        98,000 - 101,000             $475 - 485
    Paciência                         72,000 - 74,000             $540 - 550
    Caeté                             30,000 - 35,000           $590 - 600*
                                   ------------------------------------------
    Total                           200,000 - 210,000             $515 - 527

    * Caeté costs based on development ore during the commissioning phase.

    The Company has provided its 2010 quarterly production and grades for its
operations as follows:

    2010 Estimated Gold Production, By Operation

                     Q1        Q2        Q3        Q4
    Operation      Actual   Estimate  Estimate  Estimate        FY 2010
                   ------   --------  --------  --------        -------

    Turmalina      16,987     23,000    30,500    29,000    98,000 - 101,000
    Paciência      14,236     18,250    20,500    20,250   72,000  -  74,000
    Caeté*            -          -    16,250    16,250   30,000  -  35,000
                 ------------------------------------------------------------
      Total        31,223     41,250    67,250    65,500   200,000 - 210,000

    Note: The FY 2010 represents the range of production for the year whereas
    quarterly figures represent the target.
          * Caeté Q3/Q4 based on development ore during the commissioning
              phase.


    2010 Estimated Feed Grades, By Operation

                     Q1        Q2        Q3        Q4
    Operation      Actual   Estimate  Estimate  Estimate        FY 2010
                   ------   --------  --------  --------        -------

    Turmalina        4.16       3.85      5.15      5.00                4.57
    Paciência        3.32       3.38      3.60      3.60                3.49
    Caeté               -          -      3.39      3.39                3.39
                 ------------------------------------------------------------
       Average       3.74       3.63      4.11      4.05                3.93

    Cash Operating
      Cost           $597       $560      $498      $480           $515-$527
    

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 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 uses the financial measures "adjusted net income" and "adjusted cash flows from operating activities" to supplement its consolidated financial statements. Adjusted net income and adjusted cash flows from operating activities reflect the elimination of special non-operating and certain non-recurring charges that do not reflect on-going costs. The Company believes that these measures are useful to investors because each excludes certain non-cash charges that the Company does not consider to be meaningful in evaluating the Company's past financial performance or future prospects and may hinder a comparison of its period to period cash flows.

The Company has also included cash operating cost per ounce processed 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.

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 income
    ($000s)
                                                 ----------------------------
                                                         Three         Three
                                                        Months        Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2010          2009
                                                 ----------------------------
    Net (loss) as reported                        $     (4,605) $      4,758
    Adjustments:
    Non-cash interest                                    1,975           361
    Other costs of goods sold                            1,519         1,100
                                                 -------------- -------------
    Adjusted net income                           $     (1,111) $      6,219
    Adjusted basic net income per share           $      (0.01) $       0.09



    Cash provided by operating activities
    ($000s)
                                                 ----------------------------
                                                         Three         Three
                                                        Months        Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2010          2009
                                                 ----------------------------
    Cash provided by operating
     activities as reported
    Net income (loss)                             $     (4,605) $      4,758
    Items not involving cash:
      Unrealized foreign exchange (gain) loss              323        (3,032)
      Stock-based compensation                              54         1,021
      Non-cash interest expense                          1,975           361
      Accretion expense                                    400           188
      Future income taxes (recovered)                     (159)            -
      Depletion and amortization                         8,157         4,985
      Unrealized loss (gain) on
       foreign exchange contracts                          699        (1,541)
    Reclamation expenditure                                (78)            -
                                                 -------------- -------------
                                                  $      6,766  $      6,740
    Change in non cash operating working capital         4,453  $       (763)
                                                 -------------- -------------
    Cash provided by operating activities         $     11,219  $      5,977
    Cash provided by operating activities
     per share                                    $       0.13  $       0.09



    -------------------------------------------------------------------------
    Summary of Cash Operating Cost per tonne processed    Three Months Ended
                                                              March 31, 2010
    -------------------------------------------------------------------------
    Production costs per statement of operations(1)             $ 21,716,000
    Change in inventory(2)                                        (2,939,000)
    Operational cost of gold produced(3)                          18,777,000
      divided by
    Tonnes processed                                                 299,000
      equals
    Cost per tonne processed                                    $      62.80



    -------------------------------------------------------------------------
    Turmalina Cash Operating Cost per tonne processed     Three Months Ended
                                                              March 31, 2010
    -------------------------------------------------------------------------
    Production costs                                            $ 11,549,000
    Change in inventory(2)                                        (2,061,000)
    Operational cost of gold produced(3)                           9,488,000
      divided by
    Tonnes processed                                                 151,000
      equals
    Cost per tonne processed                                    $      62.90



    -------------------------------------------------------------------------
    Paciência Cash Operating Cost per tonne processed     Three Months Ended
                                                              March 31, 2010
    -------------------------------------------------------------------------
    Production costs                                            $ 10,167,000
    Change in inventory(2)                                          (878,000)
    Operational cost of gold produced(3)                           9,289,000
      divided by
    Tonnes processed                                                 148,000
      equals
    Cost per tonne processed                                    $      62.80



    -------------------------------------------------------------------------
    Summary of Cash Operating Cost per oz of gold produced      Three Months
                                                                       Ended
                                                              March 31, 2010
    -------------------------------------------------------------------------
    Production costs per statement of operations(1)             $ 21,716,000
    Change in inventory(2)                                        (3,075,000)
    Operational cost of gold produced(3)                          18,641,000
      divided by
    Gold produced (oz)                                                31,223
      equals
    Cost per oz of gold produced                                $        597



    -------------------------------------------------------------------------
    Turmalina Plant Cash Operating Cost per oz produced   Three Months Ended
                                                              March 31, 2010
    -------------------------------------------------------------------------
    Production costs                                            $ 11,549,000
    Change in inventory(2)                                        (2,189,000)
    Operational cost of gold produced(3)                           9,360,000
      divided by
    Gold produced (oz)                                                16,987
      equals
    Cost per oz of gold produced                                $        551



    -------------------------------------------------------------------------
    Paciência Plant Cash Operating Cost per oz produced   Three Months Ended
                                                              March 31, 2010
    -------------------------------------------------------------------------
    Production costs                                            $ 10,167,000
    Change in inventory(2)                                          (971,000)
    Operational cost of gold produced(3)                           9,196,000
      divided by
    Gold produced (oz)                                                14,236
      equals
    Cost per oz of gold produced                                $        646

    1.  Production costs do not include cost of goods sold adjustment of
        approximately $1.5 million, royalties of $1.5 million and CFEM tax of
        $410,000 for the three months ended March 31, 2010.

    2.  Under the Company's revenue recognition policy, revenue is recognized
        when legal title passes. Since total cash operating costs are
        calculated on a production basis, this change reflects the portion of
        gold production for which revenue has not been recognized in the
        period.

    3.  The basis for calculating cost per ounce produced includes the change
        to gold in process inventory, whereas the cost per tonne processed
        does not.
    

The following tables are included in Jaguar's unaudited interim financial statements and Management Discussion and Analysis of Financial Condition and Results of Operations for the period ended March 31, 2010 as filed on SEDAR and EDGAR and readers should refer to those filings for the associated footnotes which are an integral part of the tables.

    
    JAGUAR MINING INC.

    Interim Consolidated Balance Sheets
    (Expressed in thousands of U.S. dollars)

    -------------------------------------------------------------------------
                                                      March 31,  December 31,
                                                          2010          2009
    -------------------------------------------------------------------------
                                                    (unaudited)
    Assets
    Current assets:
      Cash and cash equivalents                   $     95,053  $    121,256
      Short-term investments                             5,811             -
      Inventory                                         35,194        36,986
      Prepaid expenses and sundry assets                18,047        19,050
      Unrealized foreign exchange gains                    581         1,280
    -------------------------------------------------------------------------
                                                       154,686       178,572

      Prepaid expenses and sundry assets                38,339        35,837
      Net smelter royalty                                1,006         1,006
      Restricted cash                                      908           108
      Property, plant and equipment                    225,631       205,329
      Mineral exploration projects                     138,187       129,743

    -------------------------------------------------------------------------
                                                  $    558,757  $    550,595
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
    Current liabilities:
      Accounts payable and accrued liabilities    $     27,273  $     22,892
      Notes payable                                      6,382         5,366
      Income taxes payable                              16,440        15,641
      Asset retirement obligations                         539           510
    -------------------------------------------------------------------------
                                                        50,634        44,409

      Deferred compensation liability                    8,767         8,616
      Notes payable                                    131,489       126,784
      Future income taxes                               11,470        11,821
      Asset retirement obligations                      12,624        12,331
      Other liabilities                                    902           738
    -------------------------------------------------------------------------
      Total liabilities                                215,886       204,699

    Shareholders' equity
      Common shares                                    367,791       365,667
      Stock options                                     14,218        14,762
      Contributed surplus                               42,028        42,028
      Deficit                                          (81,166)      (76,561)
    -------------------------------------------------------------------------
                                                       342,871       345,896
      Commitments
    -------------------------------------------------------------------------
                                                  $    558,757  $    550,595
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    JAGUAR MINING INC.

    Interim Consolidated Statements of Operations and
    Comprehensive Income (Loss)
    (Expressed in thousands of U.S. dollars, except per share amounts)

    (unaudited)

    -------------------------------------------------------------------------
                                                  Three Months  Three Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2010          2009
    -------------------------------------------------------------------------

    Gold sales                                    $     40,670  $     33,285
    Production costs                                   (25,140)      (17,083)
    Stock-based compensation                              (127)          (27)
    Depletion and amortization                          (8,033)       (4,883)
    -------------------------------------------------------------------------
    Gross profit                                         7,370        11,292
    -------------------------------------------------------------------------

    Operating expenses:
      Exploration                                        1,107           639
      Stock-based compensation (recovery)                  (73)          994
      Administration                                     4,297         3,761
      Management fees                                      339           525
      Amortization                                         124           102
      Accretion expense                                    400           188
      Other                                                689           753
    -------------------------------------------------------------------------
      Total operating expenses                           6,883         6,962
    -------------------------------------------------------------------------

    Income before the following                            487         4,330
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Loss (gain) on forward foreign
     exchange derivatives                                  253          (287)
    Foreign exchange loss (gain)                           489        (2,578)
    Interest expense                                     3,982         2,214
    Interest income                                     (1,361)         (499)
    Gain on disposition of property                       (497)         (459)
    Other non-operating expenses                             -           741
    -------------------------------------------------------------------------
    Total other expenses                                 2,866          (868)

    Income (loss) before income taxes                   (2,379)        5,198
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Income taxes
      Current income taxes                               2,385           440
      Future income taxes                                 (159)            -
    -------------------------------------------------------------------------
    Total income taxes                                   2,226           440
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Net income (loss) and comprehensive
     income (loss) for the period                       (4,605)        4,758
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted net income
     (loss) per share                             $      (0.05) $       0.07

    Weighted average number of common
     shares outstanding - Basic                     83,995,337    68,621,449
    Weighted average number of common shares
     outstanding - Diluted                          83,995,337    69,779,608



    JAGUAR MINING INC.

    Interim Consolidated Statements of Cash Flows
    (Expressed in thousands of U.S. dollars)

    (unaudited)

    -------------------------------------------------------------------------
                                                  Three Months  Three Months
                                                         Ended         Ended
                                                      March 31,     March 31,
                                                          2010          2009
    -------------------------------------------------------------------------

    Cash provided by (used in):
      Operating activities:
        Net income (loss) for the period          $     (4,605) $      4,758
        Items not involving cash:
          Unrealized foreign exchange (gain) loss          323        (3,032)
          Stock-based compensation                          54         1,021
          Non-cash interest expense                      1,975           361
          Accretion expense                                400           188
          Future income taxes                             (159)            -
          Depletion and amortization                     8,157         4,985
          Unrealized loss (gain) on foreign
           exchange contracts                              699        (1,541)
        Reclamation expenditure                            (78)            -
    -------------------------------------------------------------------------
                                                         6,766         6,740

      Change in non-cash operating working capital
          Inventory                                      2,209          (304)
          Prepaid expenses and sundry assets            (2,936)         (210)
          Accounts payable and accrued liabilities       4,381          (419)
          Current taxes payable                            799           170
    -------------------------------------------------------------------------
                                                        11,219         5,977
      Financing activities:
         Issuance of common shares, special
          warrants and warrants, net                     1,501        63,401
         Increase in restricted cash                      (800)            -
         Repayment of debt                                 (68)         (288)
         Increase in debt                                3,542             -
         Other long term liabilities                       164             -
    -------------------------------------------------------------------------
                                                         4,339        63,113

      Investing activities
         Short term investments                         (5,811)            -
         Mineral exploration projects                   (8,393)       (1,667)
         Purchase of property, plant and equipment     (28,537)       (3,897)
    -------------------------------------------------------------------------
                                                       (42,741)       (5,564)

    Effect of foreign exchange on non-U.S.
     dollar denominated cash and cash equivalents          980           605
    Increase (decrease) in cash
     and cash equivalents                              (26,203)       64,131
    Cash and cash equivalents,
     beginning of period                               121,256        20,560
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of period      $     95,053  $     84,691
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Conference Call Details

The Company will hold a conference call tomorrow, May 12 at 10:00 a.m. EST, to discuss the results.

    
                   From North America:  800-218-5691
                   International:       213-416-2192
                   Replay:
                   From North America:  800-675-9924
                   International:       213-416-2185
                   Replay ID:           51210
                   Webcast:             www.jaguarmining.com
    

About Jaguar Mining

Jaguar is one of the fastest growing gold producers in Brazil with operations in a prolific greenstone belt in the state of Minas Gerais and has plans to develop the Gurupi Project in northern Brazil in the state of Maranhao. Jaguar is actively exploring and developing additional mineral resources at its approximate 575,000-acre land base in Brazil. The Company has no gold hedges in place thereby providing the leverage to gold prices directly to its investors. 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. This press release contains forward-looking statements, including statements concerning when commissioning and commercial production will commence at Caeté, future trends in production, revenue and cash flow and estimates for 2010 production and cash operating costs. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual timing of commissioning, production and results of operations 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 labour and equipment, the possibility of labour 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. These forward-looking statements represent the Company's views as of the date hereof. Subsequent events and developments could 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 other than 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, 2009 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, 2009 filed with the United States Securities and Exchange Commission and available at www.edgar.com.

%CIK: 0001333849

SOURCE Jaguar Mining Inc.

For further information: For further information: 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


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