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 $1.00.
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Estimated Estimated
Operation 2010 FY 2010
Production Cash Operating Cost
(oz) ($/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
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Summary of Cash Operating Cost per tonne processed Three Months Ended
March 31, 2010
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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
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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
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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
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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
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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
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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
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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
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$ 558,757 $ 550,595
-------------------------------------------------------------------------
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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
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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)
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342,871 345,896
Commitments
-------------------------------------------------------------------------
$ 558,757 $ 550,595
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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)
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Gross profit 7,370 11,292
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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
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Total operating expenses 6,883 6,962
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Income before the following 487 4,330
-------------------------------------------------------------------------
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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
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Total other expenses 2,866 (868)
Income (loss) before income taxes (2,379) 5,198
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Income taxes
Current income taxes 2,385 440
Future income taxes (159) -
-------------------------------------------------------------------------
Total income taxes 2,226 440
-------------------------------------------------------------------------
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Net income (loss) and comprehensive
income (loss) for the period (4,605) 4,758
-------------------------------------------------------------------------
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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
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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 -
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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)
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(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
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Cash and cash equivalents, end of period $ 95,053 $ 84,691
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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
For further information: Investors and analysts: Bob Zwerneman, Vice President Corporate Development and Director of Investor Relations, (603) 224-4800, [email protected]; Media inquiries: Valéria Rezende DioDato, Director of Communication, (603) 224-4800, [email protected]
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