JAG - TSX/NYSE
BELO HORIZONTE, Brazil, June 15, 2012 /CNW/ - Jaguar Mining Inc. (JAG: TSX/NYSE) responded today to erroneous and misleading allegations made by Bristol
Investment Partners regarding Jaguar's recently concluded strategic
"We want to set the record straight by putting the facts on the table,"
Gary German, Jaguar's chairman said. "Bristol's recent public
assertions are simply too inaccurate and misleading to leave them
Shandong Gold made an approach -- not a bid, as Bristol suggests.
In its 13D filed on June 13, 2012, Bristol repeatedly refers to the
Shandong Gold Group's leaked proposal as if it were a firm offer of
US$9.30 per share that the board should immediately have embraced. In
fact, the proposal was highly conditional and one sided, requiring
Jaguar to enter into exclusive discussions with Shandong to the
exclusion of other proposals.
Shandong demanded full break fees, the right to expense reimbursement
and significant control over Jaguar's operations. Yet Shandong
effectively would have been free to walk away from the transaction if
it chose to do so. Given the fall in gold equity prices in early 2012,
coupled with Shandong's refusal to participate in the process or engage
in talks with the special committee, Jaguar remains convinced that the
proposed transaction with Shandong would never have been consummated.
Bristol shows a fundamental ignorance of the board's fiduciary duties.
Bristol incorrectly states that the board had a fiduciary duty to accept
the Shandong proposal. In fact, the board's duty was to engage in a
thoughtful and exhaustive process that pitted Shandong against other
potential bidders. Bristol creates the impression that the directors
should have accepted Shandong's terms simply on the basis of the
premium to Jaguar's then-prevailing share price held out by the Chinese
company. The board would have been reckless to do so. Other factors,
such as the one-sided nature of the proposal and the possibility of a
higher offer from another party, were key considerations that also had
to be taken into account, and it would have been irresponsible and
inconsistent with the board's fiduciary responsibilities for the board
to do what Bristol suggests.
Bristol incorrectly accuses the special committee of dragging its feet.
Bristol incorrectly asserts that the special committee waited until the
end of the review process to engage with Shandong, and that there was a
bias against Shandong. This is a complete fabrication and bears no
relationship to what actually occurred. The special committee was
willing to negotiate with Shandong or any other potential bidder
without any personal or professional bias at all times following its
formation. As disclosed in Jaguar's May 8 press release, the special
committee made persistent and repeated efforts over a period of five
months, both directly and through advisors and intermediaries, to
engage Shandong in change of control discussions. Mr. German wrote to
Shandong's chairman in early January, offering to meet anywhere that
suited Shandong to discuss a transaction. Shandong declined this
offer, and every other offer that was made to it, orally and in
writing, on numerous occassions.
Bristol seems unsure whether the special committee worked too hard or
not hard enough. On the one hand, its letter and Schedule 13D filing
suggest that there was a lack of urgency. On the other, they assert
that the special committee met too often. The truth is that the special
committee and its advisors worked tirelessly to complete a transaction.
Bristol falsely accuses the special committee of ignoring it.
Bristol claims that the committee disregarded its written concerns and
notes that no formal response was provided to its April 27 letter to
the committee. But it fails to mention the numerous calls and e-mails
between Bristol's executives and Jaguar's committee members or
representatives in which Bristol was repeatedly told that Jaguar, as a
public company, could not -- and would not -- selectively disclose
information to Bristol or any other shareholder. Even so, Bristol
continued to pump Jaguar for information persistently and on numerous
Furthermore, Bristol fails to disclose that in response to its April 27
letter, Jaguar offered to provide Bristol with full details of the
strategic process on condition that Bristol enter into a
confidentiality agreement and suspend its trading activities, so as to
avoid selective disclosure violations. Bristol declined this offer,
saying that it preferred to wait for the public disclosure that came a
few days later on May 8.
Bristol's allegations of conflicts of interest are completed unfounded
Bristol's allegations of conflicts of interest due to previously granted
Cliff SARs are completely unfounded. The company notes that the
special committee continued to diligently pursue a change of control
transaction in March and April after the gold equity markets had
significantly declined with the full knowledge that any such
transaction would have been below $10 per share. At no time during the
strategic process did the board or the special committee set or even
discuss any floor price below which a transaction would not be
pursued. The implications of the Cliff SARs to the directors and
officers of Jaguar were never considered by either the board or the
special committee members in any way whatsoever, and it is a complete
fabrication to suggest otherwise.
Bristol mischaracterizes standstill agreements with potential bidders.
Bristol refers in its Schedule 13D filing to standstill agreements with
potential buyers that, it says, had the result of "blocking" hostile
bids or "hamstrung the abilities" of potential bidders to make offers.
It fails to mention that such standstills are a widely accepted and
completely normal element in confidentiality agreements with potential
bidders. Indeed, none of the parties that signed such agreements with
Jaguar voiced any objections of any nature whatsoever to the inclusion
of a standstill.
Bristol should point its finger at the gold equity markets, not Jaguar.
As previously detailed in the company's May 8 press release, the special
committee and its highly-respected advisors worked tirelessly and
diligently for six months to finalize a change of control transaction.
Jaguar contacted or was contacted by 22 parties, and signed
confidentiality agreements with five of them. Three went so far as to
conduct site visits in Brazil. Detailed negotiations continued until
April 2012 with one North American mining company that appeared eager
to consummate a transaction, and as late as February 2012, proposed a
prince range that included a price higher than the price proposed by
Shandong in November 2011. Had the gold equity markets not declined as
they did in the first several months of 2012, Jaguar is confident that
a transaction would have been consummated.
Bristol was apparently so confident that a deal was in the offing that
it acquired more than two million additional Jaguar shares around the
time that the Shandong proposal was disclosed, and in the months
following. According to regulatory filings, Bristol's holdings rose
from 3.87 million shares on June 30, 2011, to 4.93 million on September
30, and 7.70 million on March 31, 2012. Bristol made those purchases
notwithstanding clear warnings in multiple press releases issued by
Jaguar throughout that period that it was entirely possible that no
change of control transaction may be completed.
"We were as disappointed as Bristol and our other shareholders with the
outcome of the strategic review", Mr. German said. "But Bristol is
pointing its finger at the wrong target. It is obvious that Bristol
acquired a large number of shares after the strategic review was
announced on the gamble that a change of control transaction would
occur. Their gamble did not pay off, and now they are looking for a
An update: CEO search and operational turnaround
As previously disclosed, Jaguar is actively searching for a new chief
executive. A number of highly qualified candidates have been identified
and the company is confident that a new CEO will be in place during the
Also as previously disclosed, and contrary to assertions by Bristol, the
company, through the leadership of the office of the chairman, has
developed and is aggressively implementing a restructuring and
turnaround plan that is expected to result in operational improvements
and significantly lower operating and administrative costs.
Forward Looking Statements
Certain statements in this press release regarding the work to resolve
operational issues and the appointment of a new chief executive officer
constitute "Forward-Looking Statements" within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995 and Canadian
securities legislation. These statements can be identified by words,
phrases or statements that certain actions, events or results may or
are expected to 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
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, 2011 filed on the
System for Electronic Document Analysis and Retrieval on March 23, 2012
and available at http://www.sedar.com and the Company's Annual Report
on Form 40-F for the year ended December 31, 2011 filed with the United
States Securities and Exchange Commission on March 26, 2012 and
available at www.sec.gov.
SOURCE Jaguar Mining Inc.
For further information:
Investors and Analysts may contact:
Vice President, Investor Relations
Members of the media may contact:
Valéria Rezende DioDato
Director of Communication