Jaguar Boasts Free Cash Flow and Stronger Liquidity
Jaguar Mining Inc. (“Jaguar” or the “Company”) (TSX: JAG) today announced financial results for the first quarter (“Q1 2020”) ended March 31, 2020. All figures are in US Dollars, unless otherwise expressed.
Q1 2020 Financial Highlights
- Gold production increased 28% with 21,008 ounces compared to 16,365 ounces in Q1 2019;
- Consolidated Cash Operating Costs (“COC”) decreased 20% to $693 per ounce mainly due to increase in head-grade and devaluation of the BRL currency;
- Consolidated All-in Sustaining Costs (“AISC”) decreased 23% to $1,103 per ounce;
- Net Income of $12.3 million; cash generated from operating activities of $8.6 million;
- Sustaining capital expenditures of $6.6 million invested in development and mining equipment, with free cash flow of $2.1 million;
- Free cash flow was $2.1 million for Q1 2020, compared to negative $4.6 million in Q1 2019. Free cash flow was lower than expected due to approximately 2,000 ounces sold on March 31, 2020, for which the payment was received in April due to COVID-19 related logistics issues. Had the payment been received in March, the free cash flow would have been $5.3 million.
- Strong liquidity as at March 31, 2020, with a cash and sold bullion receivable of $15.6 million, as compared to $11.7 million of cash and unsold bullion on December 31, 2019;
- Delivered into all gold option contracts and is completely unhedged at the end of Q1 2020.
Vern Baker, President and CEO of Jaguar Mining stated: “During Q1 2020, we continued improving production numbers as we move toward our sustainable goal of 25,000 ounces per quarter. Q1 2020 is our second quarter in a row with positive free cash flow, and the fourth quarter in a row with increasing ounce production. With the fulfillment of the last option contracts Jaguar is unhedged. I would like to thank our team of miners in Brasil for their efforts and commitment. This is especially evident as we deal with the COVID-19 crisis. The team has maintained focus, operating safely and continuing to build the company´s capacity for sustainable production.
While the COVID-19 issue remains a critical theme in operations, the team is committed to continuing our path toward 25,000 ounces per quarter. Coupled with the current gold price and favourable exchange rate the steady expected improvement of production will show up in increasingly stronger financials each quarter this year.”
Vern added, “Pilar Gold Mine had its highest production quarter on record at 11,521 ounces. Turmalina Gold Mine production was consistent with the prior quarter at 9,487 ounces, and development rates are sufficient to see the augmentation of production in the second half of the year.
In Q1 2020 we completed our option contracts (6,700 ounces at $1,363 per ounce) and completely unhedged. Bank debt is $4.8 at March 31, 2020. All the bank debt is held by Brazilian banks and is unsecured.”
Q1 2020 Financial Results
Cash Position and Use of Funds
- Strong treasury position as at March 31, 2020, with a cash and unsold bullion balance of $15.6 million as compared to $11.7 million of cash and unsold bullion on December 31, 2019. As of the end of Q1 2020, the Company is completely unhedged on gold price.
- As at March 31, 2020, working capital was $12.5 million, compared to $9.4 million as at December 31, 2019, which includes $4.8 million in loans from Brazilian banks, which mature every six months and are expected to be rolled forward.
Scientific and technical information contained in this press release has been reviewed and approved by Jonathan Victor Hill, BSc (Hons) (Economic Geology – UCT), Senior Expert Advisor Geology and Exploration to the Jaguar Mining Management Committee, who is also an employee of Jaguar Mining Inc., and is a “qualified person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”).
The Iron Quadrangle
The Iron Quadrangle has been an area of mineral exploration dating back to the 16th century. The discovery in 1699–1701 of gold contaminated with iron and platinum-group metals in the southeastern corner of the Iron Quadrangle gave rise to the name of the town Ouro Preto (Black Gold). The Iron Quadrangle contains world-class multi-million-ounce gold deposits such as Morro Velho, Cuiabá, and São Bento. Jaguar holds the second largest gold land position in the Iron Quadrangle with just over 25,000 hectares.
About Jaguar Mining Inc.
Jaguar Mining Inc. is a Canadian-listed junior gold mining, development, and exploration company operating in Brazil with three gold mining complexes and a large land package with significant upside exploration potential from mineral claims covering an area of approximately 64,000 hectares. The Company’s principal operating assets are located in the Iron Quadrangle, a prolific greenstone belt in the state of Minas Gerais and include the Turmalina Gold Mine Complex and Caeté Mining Complex (Pilar and Roça Grande Mines, and Caeté Plant). The Company also owns the Paciência Gold Mine Complex, which has been on care and maintenance since 2012. The Roça Grande Mine has been on temporary care and maintenance since April 2019.