Jaguar Mining Reports Q4 and FY 2006 Earnings

    Company in Strongest Position Ever to Deliver on Plans

    JAG - TSX

    CONCORD, March 26 /CNW/ - Jaguar Mining Inc. ("Jaguar" or "the Company")
(JAG-TSX) reports its financial and operational results for the period ended
December 31, 2006. All figures are in U.S. dollars unless otherwise indicated.

    FY 2006 Highlights
    -   Net loss of $12.7 million or $0.30 per fully diluted share compared
        to a net loss of $12.8 million or $0.41 per fully diluted share for
        2005, of which;
    -   $12.8 million was for non-cash charges for stock-based compensation
        costs of $6.0 million and unrealized forward sales derivative losses
        of $6.8 million exceeded the reported FY 2006 loss.
    -   Operating cash flow before changes in non-cash working capital
        resulted in $2.0 million of cash generated in 2006 compared to
        $3.0 million of cash consumed in 2005.
    -   Gold production of 37,876 ounces ("oz") and gold sales of 34,880 oz
        at an average realized price of $607/oz;
    -   Despite the Brazilian real ("R$") increasing over 10% against the
        U.S. dollar ("US$") during the year, Jaguar's cash operating costs
        decreased 30% averaging $370/oz for 2006 versus $528/oz for 2005;
    -   More than doubled proven and probable reserves to 770,000 oz from
        370,000 oz in 2005;
    -   Invested $51.1 million in Jaguar's future: new facilities,
        exploration and feasibility studies in 2006;
    -   Cash balance of $14.8 million at year-end; working capital of
        $11.0 million.
    -   Completed construction of Turmalina operation in 11 months and
        commissioned Phase I during the fourth quarter and recorded the first
        gold pour in early January.
    -   Invested in new personnel to continue expansion effort to 300,000 oz
        of production in 2009 and in new systems to safeguard the integrity
        of financial reports.

    Q4 2006 Highlights
    -   Revenue of $6.3 million for the quarter, a four-fold increase over Q4
    -   Produced 9,303 oz and sold 10,373 oz at a realized price of $608/oz
        versus sales of 3,202 oz at a realized price of $482/oz in Q4 2005;
    -   Q4 cash operating costs averaged $372/oz;
    -   Excluding gold produced at operations that were discontinued during
        Q4, cash operating costs averaged $290/oz representing 84% of Q4
    -   Invested $17.6 million in project development, feasibility studies
        and exploration;
    -   Completed the initial phase of a scoping study to convert and expand
        the existing Caeté oxide operation to a sulfide process using ore
        from the Pilar mine as well as from the Roça Grande mineral property;
    -   Non-cash charges for stock-based compensation costs of $3,064,000 and
        unrealized forward sales derivative losses of $2,439,000 represented
        approximately 85% of the reported Q4 pre-tax loss.

    Subsequent Events in Q1 2007
    -   Raised net proceeds of Cdn.$82.7 million through the private
        placement of units at minimal dilution to existing shareholders;
    -   Announced an early exercise of Jaguar's publicly-traded warrants to
        raise up to Cdn.$24.3 million and received approval from
        warrantholders and shareholders to proceed with the effort;
    -   Completed the pre-feasibility study on the Paciência Santa Isabel
        project to add 75,000 oz of average annual gold production beginning
        in mid-2008;
    -   Reported proven and probable reserves of 1.14 million oz as of
        March 22, 2007;
    -   Entered into a Joint Venture agreement with Xstrata plc for Jaguar to
        explore the Pedra Branca Gold Project in the State of Ceara in
        Northern Brazil.
    -   Received approval from the NYSE Group to proceed with the necessary
        regulatory filings and review process to list on the NYSE Arca

    2006 Fourth Quarter Results
    For the quarter ending December 31, 2006, the Company recorded revenue of
$6.3 million from the sale of 10,373 ounces of gold based upon an average
realized price of $608/oz. This compares to revenue of $1.5 million from the
sale of 3,202 ounces of gold at an average price of $482/oz for the same
period in 2005. Gold production for Q4 2006 totaled 9,303 ounces at an average
cash operating cost of $372/oz. Net loss for Q4 2006 was $6.2 million or $0.13
per fully-diluted share, versus a reported net loss of $6.8 million or $0.21
per share, for the same period last year. Approximately 85% of the reported
fourth quarter pre-tax loss represented non-cash charges for stock-based
compensation and the loss on forward sales derivatives. Operating costs for
the quarter were negatively impacted by unabsorbed local overhead on limited
production and certain non-recurring charges, including:

    (a)  the cessation of oxide gold production at Caeté and,

    (b)  the commissioning of Turmalina.

    Overall costs for administration also increased during the fourth quarter
mainly due to increased staffing needs related to the management of the
engineering, procurement and construction (EPC) department as a result of
Jaguar's expansion of operations in Brazil. In addition, costs increased due
to the strengthening of the R$ against the US$, new management information
systems implementation, and consulting fees related to the assessment of
internal controls and procedures.
    Commenting on the 2006 results, Daniel R. Titcomb, Jaguar's President and
CEO stated, "2006 was a very productive and successful year for Jaguar. We
demonstrated that we could design, build and start-up new low-cost operations
and continue expanding our resource base through a highly-focused drilling
program. Today our operations are generating cash and we expect operating cash
flow to rise significantly as Turmalina gains stride and the new facilities
are brought on-stream. At the end of the first quarter, we are now in the
strongest position ever to build significant shareholder value. Upon
completion of the two corporate initiatives we recently conducted, the early
exercise of outstanding warrants and the private placement of units, will
raise our cash resources by over $90 million. We are now fully-capitalized to
deliver on our target to produce 300,000 oz of gold in 2009 at a cost
structure that would place us in the lower quartile of all primary producers.
Jaguar's entire organization is executing on plan to achieve that target."

    The Company has provided a forecast of estimated production, cash
operating costs and capital spending plans for the 2007 to 2009 period in
documents as filed on SEDAR and is available at This
same information can also be found on the Company's web site in the Corporate
Presentation section under the Investor Relations tab at

    Conference Call Details
    Jaguar will be holding a conference call March 27, at 10:00 am EDT to
discuss its 2006 fourth quarter and annual results.
    North American participants may access the call toll-free by dialing
800-870-0018. International participants should call 310-287-9836. Persons
wishing to participate in this conference call are asked to dial-in at least
five minutes prior to the start time to ensure prompt access to the call.
    Jaguar will provide a web cast of this call over the Internet, which can
be accessed from the Calendar of Events tab located on the Company's homepage
at An archive of the web cast and the audio replay will
be available approximately one hour after the call ends through April 13,
2007. The audio replay can be accessed by calling 800-675-9924 from North
America or 310-287-9926 outside of North America. The replay ID number is
32707. The web cast will be available through the Company's homepage until
April 13, 2007.

    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. Jaguar
is actively exploring and developing additional mineral resources at its
72,000 acre land base. Additional information is available on the Company's
website at

    Forward Looking Statements
    This press release contains Forward-Looking Statements concerning
Jaguar's 2007 objectives, the measured and indicated resources, their average
grade, the commencement period of production, cash operating costs and
completion dates of feasibility studies, gold production and sales targets,
capital expenditure costs, future profitability and growth in reserves.
Forward-Looking Statements can be identified by the use of words, such as "are
expected", "is forecast", "approximately" or variations of such words and
phrases or state 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 factors include the inherent risks involved
in the exploration and development of mineral properties, the uncertainties
involved in interpreting drilling results and other ecological 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 our views 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. 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, 2005 filed on System for
Electronic Document Analysis and Retrieval ("SEDAR") and available at Further information about the Company is available on
SEDAR and on its corporate website


    Consolidated Balance Sheet
    (Expressed in thousands of U.S. dollars)
    December 31, 2006 and 2005

                                                  December 31,   December 31,
                                                         2006           2005
    Current assets:
      Cash and cash equivalents                   $    14,759    $     9,533
      Accounts receivable                               1,742            581
      Inventory (Note 4)                                5,297          1,573
      Prepaid expenses and sundry assets (Note 6)       4,812          2,347
                                                       26,610         14,034

      Prepaid expenses and sundry assets (Note 6)       9,657          4,668
      Unrealized foreign exchange gains
       (Note 16(b)(ii))                                   709              -
      Loan receivable (Note 3)                              -          1,631
      Net smelter royalty (Note 5)                      1,535              -
      Restricted cash (Note 17)                         6,027              -
      Plant and equipment (Note 7)                     37,496         12,663
      Mineral exploration projects and mining
       properties (Note 8)                             42,096         18,239

                                                  $   124,130    $    51,235

    Liabilities and Shareholders' Equity
    Current liabilities:
      Accounts payable and accrued liabilities    $     6,625    $     4,765
      Current portion of notes payable (Note 10)        5,274          1,439
      Asset retirement obligations (Note 9)               289            137
      Forward sales derivative liability
       (Note 16(b)(i))                                  3,388              -
                                                       15,576          6,341

      Forward sales derivative liability
       (Note 16(b)(i))                                  6,828          3,393
      Notes payable (Note 10)                          10,550            799
      Future income taxes (Note 11)                       421            629
      Asset retirement obligations (Note 9)             1,380             74
      Total liabilities                                34,755         11,236

      Shareholders' equity
      Common shares  (Note 12(a))                     106,834         48,013
      Warrants (Note 12(b))                            4,072           6,554
      Stock options (Note 12(c))                        8,745          4,026
      Contributed surplus (Note 12(d))                  1,149            117
      Deficit                                         (31,425)       (18,711)
                                                       89,375         39,999
      Commitments (Notes 8,16 and 18)
      Subsequent events (Notes 5 and 20)
                                                  $   124,130    $    51,235

    See accompanying notes to consolidated financial statements.


    Consolidated Statements of Operations and Deficit
    (Expressed in thousands of U.S. dollars,
     except per share amounts)

                                                   Year Ended     Year Ended
                                                  December 31,   December 31,
                                                         2006           2005
    Gold sales                                    $    21,179    $     8,510
    Production costs                                  (13,195)        (6,932)
    Other cost of goods sold                             (447)             -
    Write down of inventory (Note 19)                       -         (4,521)
    Depletion and amortization                         (2,376)        (1,773)
    Gross profit (loss)                                 5,161         (4,716)

    Operating expenses:
      Exploration                                         183             85
      Stock-based compensation (Note 12(c))             5,990          1,791
      Administration                                    7,375          4,474
      Management fees (Note 14(a))                        739          1,014
      Accretion expense                                    27              7
      Other                                               486            356
      Total operating expenses                         14,800          7,727

    Loss before the following                          (9,639)       (12,443)

    Unrealized loss on forward sales derivatives
     (Note 16(b)(i))                                    6,823          3,393
    Realized loss on forward sales derivatives
     (Note 16(b)(i))                                        -            150
    Unrealized gain on forward foreign exchange
     derivatives (Note 16(b)(ii))                        (709)             -
    Realized loss (gain) on forward foreign exchange
     derivatives (Note 16(b)(ii))                        (846)             -
    Foreign exchange gain                              (1,871)        (1,093)
    Amortization of deferred financing expense            698              -
    Interest expense                                      270            184
    Interest income                                    (1,582)        (1,631)
    Total other expenses                                2,783          1,003

    Loss before income taxes                          (12,422)       (13,446)
    Income taxes  (Note 11)
      Current income taxes                                591            185
      Future income taxes (recovered)                    (267)          (793)
    Total income taxes (recovered)                        324           (608)

    Net loss for the year                             (12,746)       (12,838)

    Deficit, beginning of year                        (18,711)        (5,913)

    Shares aquired for cancellation
     (Note 12(a)(iii))                                     (2)             -
    Interest income - share purchase loans
     (Note 12(a)(i))                                       34             40

    Deficit, end of year                          $   (31,425)   $   (18,711)

    Basic and diluted net loss per share
     (Note 13)                                    $     (0.30)   $     (0.41)

    See accompanying notes to consolidated financial statements.


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

                                                   Year Ended     Year Ended
                                                  December 31,   December 31,
                                                         2006           2005
    Cash provided by (used in):
      Operating activities:
        Net income (loss) for the year            $   (12,746)   $   (12,838)
        Items not involving cash:
          Unrealized foreign exchange (gain) loss         (70)           172
          Stock-based compensation                      5,990          1,791
          Amortization of deferred financing costs        698              -
          Accretion expense                                27              7
          Future income taxes recovered                  (267)          (793)
          Depletion and amortization                    2,376          1,773
          Interest on loans receivable                   (102)        (1,051)
          Write down of inventory                           -          4,521
          Unrealized loss on forward sales
           derivatives                                  6,823          3,393
          Unrealized gain on foreign exchange
           contracts                                     (709)             -

      Change in non-cash operating working capital
        Accounts receivable                            (1,161)          (581)
        Inventory                                      (2,193)        (2,605)
        Prepaid expenses and sundry assets             (8,118)        (4,046)
        Accounts payable and accrued liabilities        1,860          2,551
        Asset retirement obligations                     (105)             -
                                                       (7,697)        (7,706)

      Financing activities:
        Repayment of loans receivable                       -            649
        Issuance of common shares, special warrants
         and warrants, net                             56,102          5,125
        Shares purchased for cancellation                  (4)             -
        Increase in restricted cash                    (6,027)             -
        Repayment of debt                              (2,028)        (1,406)
        Increase in debt                               14,965              -
                                                       63,008          4,368

      Investing activities
        Mineral exploration projects and mining
         properties                                   (24,663)        (9,947)
        Advances to Prometalica                             -         (1,622)
        Repayment from Prometalica                          -          4,509
        Purchase of plant and equipment               (25,422)        (9,560)
                                                      (50,085)       (16,620)

    Increase (decrease) in cash and cash
     equivalents                                        5,226        (19,958)
    Cash and cash equivalents, beginning of year        9,533         29,491
    Cash and cash equivalents, end of year        $    14,759    $     9,533

    Supplemental cash flow information (Note 15)

    See accompanying notes to consolidated financial statements.

For further information:

For further information: Investors and analysts: Bob Zwerneman, Director
of Investor Relations, (603) 224-4800,; Media inquiries:
Valéria Rezende DioDato, Director of Communication, (603) 224-4800,; Company website:

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890