TORONTO, Dec. 3, 2013 /CNW/ - As previously announced, Jaguar Mining
Inc. ("Jaguar" or the "Company") elected to defer the payment of
semi-annual interest on its 4.5% Convertible Notes due 2014 (the "2014
Notes") on November 1, 2013 (the "Deferred Interest"). The deferral
enables Jaguar to continue to direct a maximum amount of cash towards
its operational and business improvements and to continue to pursue its
proposed recapitalization transaction, which was announced on November
13, 2013 (the "Recapitalization").
The indenture, dated September 15, 2009 (the "Indenture") among the
Company, The Bank of New York Mellon, as trustee (the "Trustee"), and
BNY Trust Company of Canada, as co-trustee (the "Co-trustee"),
governing the 2014 Notes provides for a 30-day grace period for payment
of the Deferred Interest, which 30-day grace period lapsed on December
2, 2013 without payment of the Deferred Interest and, as a result, an
event of default under the Indenture has occurred.
The Indenture makes certain remedies available upon the occurrence of
such an event of default, including the right for either (i) the
Trustee and the Co-trustee; or (ii) the holders of not less than 25% of
the aggregate principal amount of 2014 Notes to declare the principal
amount plus accrued and unpaid interest on the 2014 Notes immediately
due and payable by notice in writing to Jaguar.
This event of default under the Indenture could result in other
creditors of the Company, including Jaguar's senior secured lender,
asserting that certain cross-defaults have occurred under their
respective credit documents.
Holders of 2014 Notes, who hold approximately 93% of the total
outstanding 2014 Notes, have agreed pursuant to a support agreement
with the Company not to support any holder of 2014 Notes in taking any
enforcement action in respect of the 2014 Notes and to provide the
trustee and the co-trustee of the 2014 Notes with any directions,
requests or consents as may reasonably be required to prevent or
restrain any such enforcement action.
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 applicable Canadian securities
legislation. These Forward-Looking Statements include, but are not
limited to, statements concerning the implementation of the
Recapitalization and the Company's future financial condition.
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 risks, uncertainties and other
factors relating to Jaguar include, but are not limited to, our level
of indebtedness and the continued deferral of the interest payment on
the 2014 Notes; the implementation and impact of the Recapitalization;
our ability to generate sufficient cash flow from operations or obtain
adequate financing to fund our capital expenditures and meet working
capital needs; the volatility of our stock price, and the ability of
our common stock to remain listed and traded on the TSX; our ability to
maintain relationships with suppliers, customers, employees,
stockholders and other third parties in light of our current liquidity
situation; the volatility of gold prices; a continuation of depressed
gold prices; regulatory and environmental risks associated with
exploration, drilling and production activities; the adverse effects of
changes in applicable tax, mining and environmental and other
regulatory legislation; the risks of conducting operations in Brazil
and the impact of pricing differentials, fluctuations in foreign
currency exchange rates and political developments on the financial
results of our operations. The results, estimates, events or other
forward-looking information predicted in any Forward-Looking Statements
may differ materially from actual results or events if known or unknown
risks, trends or uncertainties affect Jaguar's business, or if Jaguar's
estimates or assumptions turn out to be inaccurate. The implementation
of the Recapitalization is subject to a number of conditions and other
risks and uncertainties including, without limitation, court and any
required regulatory approvals (including stock exchange approvals).
Accordingly, there can be no assurance that the Recapitalization will
occur, or that it will occur on the terms and conditions contemplated.
The Recapitalization could be modified, restructured or terminated.
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.
About Jaguar Mining Inc.
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 Northeastern 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.
SOURCE: Jaguar Mining Inc.
For further information:
Chief Financial Officer