B2Gold Corp. press release
Jaguar Mining Reports Financial Results for the Fourth Quarter and Full Year 2022
TSX - Toronto Stock Exchange · Gold · Canada
TORONTO, ON / ACCESSWIRE / March 30, 2023 / Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX:JAG)(OTCQX:JAGGF) today announced financial results for the fourth quarter and full year ended December 31, 2022. All figures are in US Dollars, unless otherwise expressed.
Fourth Quarter Highlights
Revenue decreased 15% to $36.1 million compared with $42.7 million in the fourth quarter of 2021. The decrease was due to a reduction in ounces sold (-10%) and a reduction in realized gold price (-5%), The Company produced 8% less ounces (21,116 vs. 22,903) and with sales of 20,940 ounces in Q4 2022 compared to 23,497 ounces in Q4 of 2021 the Company saw an increase in inventory rather than a decrease. Gold production decreased by 8% to 21,116 ounces compared to 22,903 ounces in the fourth quarter of 2021. The lower production rate was due to a reduction in tonnes of ore processed of 2% and a decrease in head grade of 5%. Operating costs totaled $21.4 million an increase of 14% compared to $18.8 million in the fourth quarter of 2021. The increase in operating costs came predominantly from a 29% increase in secondary development combined with the inflationary pressures of the first 6 months of the year. Cash operating costs1increased to $1,024 per ounce of gold sold compared to $802 per ounce of gold sold in the fourth quarter of 2021 due to the higher operating costs and the reduction in ounces sold. All-in sustaining costs1increased to $1,597 per ounce of gold sold compared to $1,127 per ounce of gold sold in the fourth quarter of 2021 due to the cash cost increase explained above, combined with higher sustaining capital expenditures including: additional primary development, rehabilitating a ventilation raise, and investing in a new fleet of trucks for Turmalina and Pilar which was received at the end of December. Net income for Q4 2022 increased to $11.5 million, compared with $3.5 million in Q4 2021, which includes an impairment reversal of $10.7 million in Q4 2022 due to the increase in inferred resources, compared with an impairment charge of $10.1 million in Q4 2021. Others major variances included a $6.6 million decline in revenue, $2.6 million increase in operating costs, $1.6 million reduction on foreign exchange gain, and an income tax expense increase of $1.9 million. Free cash flow1was $1.5 million and was based on operating cash flow plus asset retirement obligation expenditures, less capital expenditures, compared to $8.2 million in the fourth quarter of 2021. Free cash flow was $72 per ounce of gold sold compared to $348 per ounce of gold sold in the fourth quarter of 2021.
_
1 This is a Non-GAAP financial performance measure with no standard definition under IFRS. For more details, refer to the Non-GAAP Performance Measures section of the MD&A.
Full Year Highlights
Revenue decreased 6% to $142.5 million compared with $151.5 million in 2021, primarily due to lower ounces of gold sold of 80,050 ounces as compared to 84,638 ounces in 2021, combined with a decrease in the average realized gold price of $1,780 per ounce compared to $1,790 per ounce in 2021. Gold production for the year decreased 3% to 80,968 ounces compared to 83,878 ounces produced in 2021. Operating cash flow of $40.8 million; adjusted EBITDA of $45 million. Cash operating costs1increased to $1,052 per ounce of gold sold compared to $831 per ounce of gold sold in 2021 mainly due to the reduction in ounces of gold sold, combined with inflation and an increase in secondary development metres compared to 2021. All-in sustaining costs1increased to $1,483 per ounce of gold sold compared to $1,215 in 2021, primarily due to the increase of in cash operating cost1explained above.
Cash Position and Working Capital1
As at year end, the Company had a cash and cash equivalents position of $25.2 million, compared to $40.4 million as of December 31, 2021. As at year end, working capital1was $19.5 million, compared to $32 million as of December 31, 2021, which includes $3 million in short term loans from Brazilian banks.
Full Year 2023 Guidance The Company previously provided its 2023 guidance on January 11, 2023. Details of production and cost guidance for the year are summarized in the table below.
| 2023 Operating Parameters | Low | High | | Production (oz of gold) | 84,000 | 88,000 | | All-In Sustaining Costs ($/oz)1 | $1,275 | $1,375 |
(US$1:BRL5.20)
Vern Baker, President and CEO of Jaguar Mining stated: "_We are pleased to report our fourth quarter and full year financial results for 2022. It was a challenging year. We focused on investing in strengthening our mines, developing the Faina project, and exploration. This investment in exploration, development, equipment, and project engineering are providing the base for our future production. Our primary growth source remains the Faina project where we have been investing in an access ramp, in significant upgrading of the resource through surface drilling, and in progressing engineering to allow full definition of the project. For the year, we kept our total sustaining capital relatively consistent while we were able to rehabilitate a ventilation raise and pay for a significant portion of a new truck fleet for the Pilar mine. We also increased our growth and exploration spending by 90% as we invested strongly into future opportunities._
"In 2022, balance sheet strength and free cash flow generation enabled us to invest almost $24 million in growth projects, including advancing the Faina project. We also committed an additional $6 million into our greenfield exploration effort while paying $7 million in dividends. Our cash balance was impacted in the fourth quarter with more development, the rehabilitation of the ventilation raise and the purchase of a new fleet of haul trucks for Pilar. These trucks match a partial fleet we have at Turmalina that have positively impacted performance in our mine haulage."
_
1 This is a Non-GAAP financial performance measure with no standard definition under IFRS. For more details, refer to the Non-GAAP Performance Measures section of the MD&A.
During the fourth quarter, our team continued to focus on consistent ounce production and increasing development meters at our mines. Diamond drilling reduced during the quarter as our Faina drilling efforts came to an end and we began preparing for new campaigns in 2023 at both mines and at several exploration opportunities."
Fourth Quarter and Full Year 2022 Results
| Financial and Operational Highlights | | | | | | | | | | | | | ($ thousands, except where indicated) | Three months ended December 31, | | Year ended December 31, | | | | | | | | | | | 2022 | | 2021 | | 2022 | | 2021 | | | | | | Financial Data | | | (Restated)1 | | | | (Restated)1 | | | | | | Revenue | $ | 36,108 | | $ | 42,703 | | $ | 142,500 | | $ | 151,467 | | Operating costs | | 21,439 | | | 18,838 | | | 84,229 | | | 70,337 | | Depreciation | | 5,229 | | | 5,089 | | | 20,175 | | | 21,092 | | Gross profit | | 9,440 | | | 18,776 | | | 38,096 | | | 60,038 | | Net income1 | | 11,525 | | | 3,552 | | | 21,440 | | | 24,055 | | Per share ("EPS")1 | | 0.16 | | | 0.05 | | | 0.30 | | | 0.33 | | EBITDA1 | | 19,274 | | | 8,887 | | | 49,699 | | | 53,929 | | Adjusted EBITDA1,2,3 | | 10,995 | | | 18,523 | | | 42,397 | | | 66,454 | | Adjusted EBITDA per share1,2,3 | | 0.15 | | | 0.26 | | | 0.59 | | | 0.92 | | Cash operating costs (per ounce sold)2 | | 1,024 | | | 802 | | | 1,052 | | | 831 | | All-in sustaining costs (per ounce sold)2 | | 1,597 | | | 1,127 | | | 1,483 | | | 1,215 | | Average realized gold price (per ounce)2 | | 1,724 | | | 1,819 | | | 1,780 | | | 1,790 | | Cash generated from operating activities | | 10,352 | | | 9,581 | | | 40,765 | | | 45,036 | | Free cash flow2 | | 1,509 | | | 8,168 | | | 17,936 | | | 24,079 | | Free cash flow (per ounce sold)2 | | 72 | | | 348 | | | 224 | | | 284 | | Sustaining capital expenditures2 | | 10,289 | | | 6,015 | | | 26,417 | | | 25,671 | | Non-sustaining capital expenditures2 | | 5,934 | | | 4,279 | | | 23,805 | | | 12,500 | | Total capital expenditures | | 16,223 | | | 10,294 | | | 50,222 | | | 38,171 | | 1Restatement of the financial statements for the year ended December 31, 2021, further information available on the 2021 Restatement note. | | | | | | | | | | | | | 2Average realized gold price, sustaining and non-sustaining capital expenditures, cash operating costs and all-in sustaining costs, free cash flow, EBITDA and adjusted EBITDA, and adjusted EBITDA per share are non-GAAP financial performance measures with no standard definition under IFRS. Refer to the Non-GAAP Financial Performance Measures section of the MD&A. | | | | | | | | | | | | | 3Adjusted EBITDA excludes non-cash items such as impairment, foreign exchange,stock-based compensation and write downs. For more details refer to the Non-GAAP Performance Measures section of the MD&A. | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended December 31, | | | Year ended December 31, | | | | | | | | | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | Operating Data | | | | | | | | | | | | | Gold produced (ounces) | | 21,116 | | | 22,903 | | | 80,968 | | | 83,878 | | Gold sold (ounces) | | 20,940 | | | 23,479 | | | 80,050 | | | 84,638 | | Primary development (metres) | | 983 | | | 1,174 | | | 3,659 | | | 4,438 | | Exploration development (metres) | | 583 | | | 284 | | | 2,649 | | | 284 | | Secondary development (metres) | | 1,538 | | | 1,189 | | | 5,264 | | | 4,835 | | Definition, infill, and exploration drilling (metres) | | 12,757 | | | 27,818 | | | 93,311 | | | 89,181 |
2021 Restatement
During the preparation of the Company's financial statements for the year ended December 31, 2022, an error was identified on the determination of the net book value in the impairment model for one of the cash-generating units (CGUs) for the year ended December 31, 2021, and as such, required a restatement of the financial statements for the year ended December 31, 2021, March 31 2022, June 30, 2022 and September 30, 2022, to reflect an impairment. There was no impact to the consolidated statement of cash flows as a result of this restatement of impairment charges. For further details, consult Note 27 of the audited consolidated financial statements for the year ended December 31, 2022, available on SEDAR. KPMG LLP has not withdrawn its audit opinion letter dated March 21, 2022, that accompanies the Company's financial statements for the year ended December 31, 2021 (as filed on SEDAR on March 21, 2022). Going forward in 2023, the Company will design and implement additional internal controls to review the impact of past impairments and reversals of past impairments on the calculation of depreciation and net book values, as well as policies and procedures to improve the overall effectiveness of internal control over financial reporting of the impairment model. Notwithstanding, the Company is confident that its disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR) were effective for the Company's annual 2022 filings without a material weakness.
Non-GAAP performance
The Company has included the following Non-GAAP performance measures in this document: cash operating costs per ounce of gold sold, all-in sustaining costs per ounce of gold sold,average realized gold price (per ounce of gold sold), sustaining capital expenditures, non-sustaining capital expenditures, adjusted operating cash flow, free cash flow, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA and working capital. These Non-GAAP performance measures do not have any standardized meaning prescribed by IFRS 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 IFRS, certain investors use this information to evaluate the Company's performance. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. More specifically, Management believes that these figures are a useful indicator to investors and management 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 of these performance measures and reconciliation of the Non-GAAP measures to reported IFRS measures are outlined below.
Reconciliation of Free Cash Flow1
| Free cash flow | | | | | | | | | | | | | ($ thousands, except where indicated) | Three months ended December 31, | | Year ended December 31, | | | | | | | | | | | 2022 | | 2021 | | 2022 | | 2021 | | | | | | Cash generated from operating activities | $ | 10,352 | | $ | 9,581 | | $ | 40,765 | | $ | 45,036 | | Adjustments | | | | | | | | | | | | | Asset Retirement Obligation | | 1,446 | | | 4,602 | | | 3,588 | | | 4,714 | | Sustaining capital expenditures2 | | (10,289) | | | (6,015) | | | (26,417) | | | (25,671) | | Free cash flow | $ | 1,509 | | $ | 8,168 | | $ | 17,936 | | $ | 24,079 | | Ounces of gold sold | | 20,940 | | | 23,479 | | | 80,050 | | | 84,638 | | Free cash flow per ounce sold | $ | 72 | | $ | 348 | | $ | 224 | | $ | 284 | | 1This is a non-GAAP financial performance measure with no standard definition under IFRS. | | | | | | | | | | | | | 2Further detail on the sustaining capital expenditures composition can be found on the reconciliation of sustaining capital and non-sustaining capital expenditures in the non-GAAP reconciliation. | | | | | | | | | | | |
Reconciliation of Cash Operating Costs, All-In Sustaining Costs and All-In Costs per Ounce Sold1
| Reconciliation of Cost of Production to Cash Operating Costs, All-in Sustaining Costs and All-in Costs | | | | | | | | | | | | | | | | | ($ thousands, except where indicated) | | Three months ended December 31, | | | Year ended December 31, | | | | | | | | | | | | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | | | | | Operating costs | | $ | 21,439 | | | $ | 18,838 | | | $ | 84,229 | | | $ | 70,337 | | General & administration expenses | | | 1,636 | | | | 1,507 | | | | 6,925 | | | | 5,703 | | Corporate stock-based compensation | | | 77 | | | | 88 | | | | 1,163 | | | | 1,044 | | Sustaining capital expenditures1 | | | 10,289 | | | | 6,015 | | | | 26,417 | | | | 25,671 | | All-in sustaining cash costs | | | 33,441 | | | | 26,448 | | | | 118,734 | | | | 102,755 | | Reclamation (operating sites) | | | - | | | | 7 | | | | 8 | | | | 60 | | All-in sustaining costs | | $ | 33,441 | | | $ | 26,455 | | | $ | 118,742 | | | $ | 102,815 | | Non-sustaining capital expenditures | | | 5,934 | | | | 4,279 | | | | 23,805 | | | | 12,500 | | Exploration and evaluation costs (greenfield) | | | 1,543 | | | | 1,829 | | | | 6,037 | | | | 5,129 | | Reclamation (non-operating sites) | | | - | | | | 94 | | | | 2 | | | | 155 | | Care and maintenance (non-operating sites) | | | 162 | | | | 237 | | | | 609 | | | | 1,013 | | All-in costs | | $ | 41,080 | | | $ | 32,894 | | | $ | 149,195 | | | $ | 121,612 | | Ounces of gold sold | | | 20,940 | | | | 23,479 | | | | 80,050 | | | | 84,638 | |
Cash operating costs per ounce sold2
| | $ | 1,024 | | | $ | 802 | | | $ | 1,052 | | | $ | 831 | |
All-in sustaining costs per ounce sold2
| | $ | 1,597 | | | $ | 1,127 | | | $ | 1,483 | | | $ | 1,215 | |
All-in costs per ounce sold2
| | $ | 1,962 | | | $ | 1,401 | | | $ | 1,864 | | | $ | 1,437 | |
Average realized gold price
| | $ | 1,724 | | | $ | 1,819 | | | $ | 1,780 | | | $ | 1,790 | |
Cash operating margin per ounce sold
| | $ | 700 | | | $ | 1,017 | | | $ | 728 | | | $ | 959 | |
All-in sustaining margin per ounce sold
| | $ | 127 | | | $ | 692 | | | $ | 297 | | | $ | 575 | | 1 Capital expenditures are included in our calculation of all-in sustaining costs and all-in costs. | | | | | | | | | | | | | | | | | 2Cash operating costs, all-in sustaining costs and all-in costs are all non-GAAP financial performance measures with no standard definition under IFRS. Result may not calculate due to rounding. | | | | | | | | | | | | | | | |
Reconciliation of sustaining capital and non-sustaining capital expenditures1
| Capital Expenditures1 | | | | | | | | | | | | | ($ thousands) | Three months ended December 31, | | Year ended December 31, | | | | | | | | | | | 2022 | | 2021 | | 2022 | | 2021 | | | | | | Sustaining capital1 | | | | | | | | | | | | | Primary development | $ | 5,778 | | $ | 4,129 | | $ | 16,830 | | $ | 15,700 | | Brownfield exploration | | 220 | | | 316 | | | 1,097 | | | 1,042 | | Mine-site sustaining | | 4,177 | | | 1,454 | | | 8,059 | | | 8,501 | | Other sustaining capital2 | | 114 | | | 116 | | | 431 | | | 428 | | Total sustaining capital1 | | 10,289 | | | 6,015 | | | 26,417 | | | 25,671 | | Non-sustaining capital (including capital projects)1 | | | | | | | | | | | | | Mine-site non-sustaining | | 4,348 | | | 1,862 | | | 19,991 | | | 5,882 | | Asset retirement obligation - non-sustaining2 | | 1,446 | | | 2,261 | | | 3,588 | | | 4,233 | | Other non-sustaining capital1 | | 140 | | | 156 | | | 226 | | | 2,385 | |
Total non-sustaining capital1
| | 5,934 | | | 4,279 | | | 23,805 | | | 12,500 | |
Total capital expenditures
| $ | 16,223 | | $ | 10,294 | | $ | 50,222 | | $ | 38,171 | | 1 Sustaining and non-sustaining capital are non-GAAP financial measures with no standard definition under IFRS. Refer to the non-GAAP Financial Performance Measures section of the MD&A. Capital expenditures are included in the calculation of all-in sustaining costs and all-in costs. | | | | | | | | | | | | | 2 Asset retirement obligation - non-sustaining is related to expenditures with dam closing projects. Payments related to the Company asset retirement obligation are classified as operating activities in accordance with IFRS financial measures. | | | | | | | | | | | |
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA1
| Reconciliation of Net Income (Loss) to EBITDA | | | | | | | | | | | | | ($ thousands, except where indicated) | Three months ended December 31, | | Year ended December 31, | | | | | | | | | | | 2022 | | 2021 (Restated)1 | | 2022 | | 2021 (Restated)1 | | | | | | Net Income | $ | 11,525 | | $ | 3,552 | | $ | 21,440 | | $ | 24,055 | | Income tax expense | | 1,884 | | | - | | | 5,426 | | | 7,939 | | Finance costs | | 617 | | | 227 | | | 2,581 | | | 776 | | Depreciation and amortization | | 5,248 | | | 5,108 | | | 20,252 | | | 21,159 | | EBITDA2 | $ | 19,274 | | $ | 8,887 | | $ | 49,699 | | $ | 53,929 | | Impairment (reversal) charges | | (10,661) | | | 10,135 | | | (10,661) | | | 10,135 | | Changes in other provisions and VAT taxes | | 1,283 | | | (10) | | | 1,188 | | | 1,358 | | Foreign exchange loss (gain) | | 1,022 | | | (577) | | | 1,008 | | | (1,698) | | Stock-based compensation | | 77 | | | 88 | | | 1,163 | | | 1,044 | | Other non-operating expenses (recoveries)3 | | - | | | - | | | - | | | 1,686 | | Adjusted EBITDA2 | $ | 10,995 | | $ | 18,523 | | $ | 42,397 | | $ | 66,454 | | | | | | | | | | | | | | | Weighted average outstanding shares | | 72,452,927 | | | 72,441,622 | | | 72,461,530 | | | 72,396,926 | | Adjusted EBITDA per share2 | $ | 0.15 | | $ | 0.26 | | $ | 0.59 | | $ | 0.92 | | 1Restatement of the financial statements for the year ended December 31, 2021, further information available on the 2021 Restatement note. | | | | | | | | | | | | | 2This is a non-GAAP financial performance measure with no standard definition under IFRS. | | | | | | | | | | | | | 3CentroGold royalty interest sales. As a result of the sale, the Company (i) derecognized the $8.5 million CentroGold project royalty interest asset, (ii) received and recorded $7.0 million in Cash, (iii) recorded $0.2 million in legal and consulting costs associated with the transaction. | | | | | | | | | | | |