Jaguar Mining Reports Updated 2017 Mineral Reserves and Mineral Resources

2018-03-02

TSX - Toronto Stock Exchange · Iron · Aluminium · Manganese · Copper · Zinc · Australia

Canada NewsWire

TORONTO, March 2, 2018

TSX: JAG

TORONTO, March 2, 2018/CNW/ -Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX: JAG) is pleased to report updated Mineral Resources and Mineral Reserves estimates as at December 31, 2017for Pilar Gold Mine ("Pilar") and Interim Mineral Resources for Turmalina Gold Mine ("Turmalina"), each prepared in accordance with CIM definitions (2014) as in National Instrument 43-101 ("NI 43-101"). The Pilar Mineral Resources and Mineral Reserves update will be supported by a NI 43-101 Technical report that will be filed on SEDAR within 45 days of this release. The Interim Turmalina Mineral Resources and the Mineral Reserves will be updated when the drill program is completed.

Year-End 2017 Pilar Gold Mine Mineral Reserves and Mineral Resources Highlights

Total Measured Resources increased 277% to 317,000 ounces of gold, net of depletion, grading 4.47 g/t.

Total Measured and Indicated ("M&I") Resources increased 10% to 532,000 ounces of gold, grading 4.37 g/t.

Inferred Resources increased 104% to 433,000 ounces grading 5.69 g/t, reflecting successful growth exploration drilling campaign in 2017 targeting high-grade deeper extensions to the principle banded iron formation Orebodies (BA, BF, and BFII) below current mine production levels.

Total Proven and Probable ("2P") Mineral Reserves of 125,000 ounces of gold, grading 3.99 g/t reflecting two-year replacement of mineral reserve depletion through production and addition of new mineral reserves, confirming over three years of future production at current production levels.

Higher quality and increased grades of newly added mineral resources facilitate resource to reserve conversion drilling to be prioritized in 2018 and scheduled as per the mine plan while ensuring financial discipline.

Interim Year-End 2017 Turmalina Gold Mine Mineral Resources Highlights

M&I Resources of 420,000 ounces of gold reflect full replacement of 45,000 ounces of 2017 mining depletion for Orebodies A, B, and C.

Measured Resources increased 8% to 265,000 ounces with a 6% increase in grade to 5.7 g/t.

Inferred Resources increased 158% to 305,000 ounces of gold with a 14% increase in grade to 5.49 g/t, reflecting successful growth exploration drilling campaign in 2017 targeting high-grade deeper extensions to the principle orebodies A and C below current mine production levels.

Focused on completing growth exploration and resource conversion drilling program throughout the first half of 2018 to further update Mineral Resources and Mineral Reserves at mid-year 2018.

Interim update based on drilling results from growth exploration, mine resource conversion and grade control drilling completed on Orebodies A, B and C to November 30, 2017compared to Mineral Resources as at December 31, 2016

Rodney Lamond, President and CEO of Jaguar Mining stated: "We have achieved solid growth in our mineral resources at our core gold production operations, Pilar and Turmalina mines. At Pilar, we replaced two years of mining depletion following a highly successful drilling campaign completed in 2017. Our continued investment in drilling has allowed us to maintain mineral reserves equivalent to over three years of reserve production mine life. Strong drilling results to date offer additional perspective and are impressive as we have significantly advanced the principal system containing Orebodies BA, BF and BFII in a short period of time, approximately seven months since growth drilling began in May 2017. As a result, Mineral Reserves at Pilar are based on the main Orebodies BA, BF and BFII currently in production above level 9 providing confidence in future production. Going forward, we are focused on upgrading and converting our Mineral Resource inventory to Mineral Reserves as well as upgrading and converting the newly discovered Inferred Resources to M&I Resources. Inferred Mineral Resources at Pilar confirm gold mineralization continues down-plunge on the main mineralized trends providing considerable potential for further additions to our Mineral Resource base. Recent positive drilling results include additional high-grade intercepts and confirm the deep extensions of primary orebodies which strengthen our confidence in delivering improved near-term production."

Mr. Lamond continued, "Moving forward our top focus is to continue drilling at our core operating assets to explore and infill drill down-plunge extensions of main orebodies to increase life of mine. The growth exploration drilling results announced over the past year resulted in the significant increase in the Mineral Resources at both Pilar and Turmalina. With approximately one million ounces in the newly reported Mineral Resources (532,000 ounces in M&I and 433,000 ounces in Inferred) at Pilar Mine alone, the Company is confident that this operation will deliver exceptional value for many years in the future. We look forward to reporting updated Turmalina mineral reserves and mineral resources once drilling is completed by the middle of 2018."

The Mineral Resource and Reserve estimates were prepared by Jaguar Mining under the supervision of Reno Pressacco, P.Geo., and Jeff Sepp, P.Eng. of Roscoe Postle Associates Inc. ("RPA"). RPA is an independent mining consultant and Mr. Pressacco and Mr. Sepp are Qualified Persons within the definition of NI 43-101. The effective date of the estimates is December 31, 2017. An independent technical report documenting the Mineral Resource and Mineral Reserves estimates for the Pilar mine, prepared in accordance with NI 43-101, will be filed on SEDAR within 45 days of the date of this press release.

About Pilar and Turmalina

Pilar is an underground gold mine and is part of the Caeté Gold Complex that also includes the underground Roça Grande gold mine and mill operation that processes ore from both mines. The Caeté Complex is located in the municipalities of Caeté and Santa Bárbara, respectively, in the state of Minas Gerais, Brazil, and is approximately 100 km from Belo Horizonte, the capital city of the state of Minas Gerais. Turmalina is an underground gold mine and plant complex, also located in the state of Minas Gerais, approximately 130 km northwest of Belo Horizonte(see Figure 1).

Pilar Gold Mine Exploration Program Drilling Results

Drilling focused on further defining the top three most significant mineralized banded iron formations (BA, BF, and BFII) known at Pilar. (See Figure 2, which identifies the drill programs completed to support the Mineral Resources and Mineral Reserves.)

The BA mineralized structure appears to diminish at depth; however, the footwall flank of the BF and both the footwall and hanging wall flanks of the BFII unit have seen increased grades and thicknesses in drilling at depth below the active areas mined in 2016 and 2017. (See press releases from September and November 2017for more detailed growth exploration drill results.)

Pilar Gold Mine Mineral Resource and Mineral Reserve Estimates as at December 31, 2017

(See Tables1–4 for more detail)

Proven & Probable Reserves: 0.97 million tonnes grading 3.99 g/t Au, containing 125,000 oz. Au Measured & Indicated Resources: 3.79 million tonnes grading 4.37 g/t Au, containing 532,000 oz. Au Inferred Resources: 2.38 million tonnes grading 5.69 g/t Au containing 433,000 oz. Au

Table 1

Pilar Gold Mine Mineral Reserves Summary December 31, 2017, compared to December 31, 2016:

| Pilar Gold Mine – Change in Mineral Reserves | | | | | | | | Gold Ounces (000's) | Gold Grade (g/t Au) | | | | | | | As at December 31 | 2017 | 2016 | Change (%) | 2017 | 2016 | Change (%) | | Proven Reserves | 81 | 2 | 3,950% | 3.78 | 2.47 | 53% | | Probable Reserves | 44 | 140 | (69%) | 4.45 | 4.62 | (4%) | | Total | 125 | 142 | (12%) | 3.99 | 4.56 | (13%) |

Table 2

Pilar Gold Mine Mineral Resources Summary December 31, 2017, compared to December 31, 2016:

| Pilar Gold Mine – Change in Mineral Resources | | | | | | | | Gold Ounces (000's) | Gold Grade (g/t Au) | | | | | | | As at December 31 | 2017 | 2016 | Change (%) | 2017 | 2016 | Change (%) | | Measured Resources | 317 | 84 | 277% | 4.47 | 4.14 | 8% | | Indicated Resources | 216 | 399 | (46%) | 4.22 | 4.62 | (9%) | | Total – M&I Resources | 532 | 482 | 10% | 4.37 | 4.53 | (4%) | | Inferred Resources | 433 | 212 | 104% | 5.69 | 5.45 | 4% |

Table 3

Pilar Gold Mine Mineral Reserves Summary as at December 31, 2017, by Orebody:

| Pilar Gold Mine - Mineral Reserves, December 31, 2017 | | | | | | | | | | | Orebody | Proven Reserves | Probable Reserves | Proven and Probable Reserves | | | | | | | | Tonnes | Grade | Gold oz. | Tonnes | Grade | Gold oz. | Tonnes | Grade | Gold oz. | | | (000's) | (g/t Au) | (000's) | (000's) | (g/t Au) | (000's) | (000's) | (g/t Au) | (000's) | | | Orebody BA | 93 | 2.47 | 7 | 102 | 5.39 | 18 | 195 | 3.99 | 25 | | Orebody BF | 263 | 4.07 | 34 | 15 | 4.12 | 2 | 278 | 4.07 | 36 | | Orebody BFII | 285 | 3.98 | 37 | 157 | 4.23 | 21 | 442 | 4.07 | 58 | | Orebody LFW | 6 | 3.02 | 1 | 7 | 2.51 | 1 | 13 | 2.73 | 1 | | Orebody LPA | 19 | 3.49 | 2 | - | - | - | 19 | 3.49 | 2 | | Orebody Torre | - | - | - | 26 | 2.78 | 2 | 26 | 2.78 | 2 | | Total | 666 | 3.78 | 81 | 307 | 4.45 | 44 | 974 | 3.99 | 125 |

| | | | Notes: | | | 1. | CIM (2014) definitions were followed for Mineral Reserves | | 2. | Mineral Reserves were estimated at a break-even cut-off grade of 2.33 g/t Au | | 3. | Mineral Reserves are estimated using an average long-term gold price of US $1,250 per ounce | | 4. | Mineral Reserves are estimated using an average long-term foreign exchange rate of 3.5 Brazilian Reais: 1 US Dollar | | 5. | A minimum mining width of 2 m was used | | 6. | Numbers may not add due to rounding |

Table 4

Pilar Gold Mine Mineral Resources Summary at December 31, 2017, by Orebody:

& Indicated Resources | Inferred Resources | | | | | | | | | | Tonnes | Grade | Gold oz. | Tonnes | Grade | Gold oz. | Tonnes | Grade | Gold oz. | Tonnes | Grade | Gold oz. | | | (000's) | (g/t Au) | (000's) | (000's) | (g/t Au) | (000's) | (000's) | (g/t Au) | (000's) | (000's) | (g/t Au) | (000's) | | | Orebody BA | 457 | 4.53 | 67 | 187 | 5.28 | 32 | 644 | 4.75 | 98 | 57 | 4.50 | 8 | | Orebody BF | 635 | 4.72 | 96 | 74 | 4.73 | 11 | 709 | 4.72 | 108 | 1,360 | 6.71 | 293 | | Orebody BFII | 488 | 4.73 | 74 | 259 | 4.56 | 38 | 747 | 4.67 | 112 | 828 | 4.38 | 117 | | Orebody Torre | 231 | 4.93 | 37 | 233 | 4.41 | 33 | 464 | 4.67 | 70 | 62 | 4.15 | 8 | | Orebody LFW (200's) | 208 | 3.18 | 21 | 34 | 3.19 | 3 | 242 | 3.18 | 25 | - | - | - | | Orebody LHW | 74 | 2.89 | 7 | 7 | 2.85 | 1 | 81 | 2.89 | 8 | - | - | - | | Orebody LPA | 110 | 4.17 | 15 | - | - | - | 110 | 4.17 | 15 | - | - | - | | Orebody SW | - | - | - | 795 | 3.82 | 98 | 795 | 3.82 | 98 | 60 | 3.46 | 7 | | Total | 2,203 | 4.47 | 317 | 1,589 | 4.22 | 216 | 3,792 | 4.37 | 532 | 2,367 | 5.69 | 433 |

| | | | Notes: | | | 1. | CIM (2014) definitions are followed for Mineral Resources | | 2. | Mineral Resources were estimated at a break-even cut-off grade of 1.93 g/t Au | | 3. | Mineral Resources are estimated using an average long-term gold price of US $1,400 per ounce | | 4. | Mineral Resources are estimated using an average long-term foreign exchange rate of 3.8 Brazilian Reais: 1 US Dollar | | 5. | A minimum mining width of 2 m was used | | 6. | Gold grades are estimated by the Ordinary Kriging interpolation algorithm using capped composite samples | | 7. | Mineral Resources are inclusive of Mineral Reserves | | 8. | Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability | | 9. | Numbers may not add due to rounding |

Pilar Gold Mine Mineral Resources and Mineral Reserves Highlights

Drilling completed in 2016 and 2017 successfully replaced depletion, maintaining mineral reserves equivalent to approximately three years of production resulting in total Mineral Resources and Mineral Reserves, including total 2P reserves, of 125,000 ounces of gold (974,000 tonnes at an average grade of 3.99 g/t Au) which were 12% lower compared to 2P of 142,000 ounces as at December 31, 2016.

2017 growth exploration drilling results clearly demonstrated continuity of the principal banded iron formation orebodies to depth beyond current mining production activities and quantified observed increases in grade, tonnes and ounces per vertical metre.

Drilling completed resulted in a significant increase in M&I and Inferred Mineral Resources, exceeding the Company's target of replacing reserves mined in 2016 and 2017, and establishing increased M&I Resources below mine Level 9 (see Figures 2, 3, 4 and 5).

Mineral Reserves at Pilar are based on the main orebodies currently in production above Level 9, BA, BF and BFII. Further work is in progress to convert the M&I inventory to 2P Reserves on material from other orebodies that are accessible from ramp development below Level 9.

The database, used to prepare the estimates, with a cut-off date of November 28, 2017, comprises 1,366 drill holes and 19,838 channel samples. The estimate was generated from a block model constrained by three-dimensional (3D) wireframe models. A capping value varying from 10 to 60 g/t Au was applied for all eight orebodies. Wireframe models of the mineralization and excavated material for Pilar were constructed by Jaguar and reviewed by RPA. A separate wireframe was prepared for each orebody and was used to constrain the grade estimates into the block model.

Mineralized material for each orebody was classified into the Measured, Indicated, or Inferred Mineral Resource categories on the basis of the search ellipse ranges obtained from the variography study, the observed continuity of the mineralization, the drill hole and channel sample density, and previous production experience from these orebodies.

The Mineral Resources are inclusive of Mineral Reserves. For those portions of the Mineral Resources that comprise the Mineral Reserve, stope design wireframes were used to constrain the Mineral Resource reports. Additional Mineral Resources are present that reside beyond the Mineral Reserves. For these areas, 3D clipping polygons were prepared to aid in the estimation of the Mineral Resources. The clipping polygons were prepared in either plan or longitudinal views, as appropriate. The clipping polygons were drawn to include continuous volumes of blocks whose estimated grades were above the stated cut-off grade, and were not located in mined out areas. The clipping polygons were used to appropriately code the block model and estimate the Mineral Resources.

For December 31, 2017, estimates, the Company prepared an updated geological and block model under the supervision of RPA. The Mineral Resources and Mineral Reserves for 2017 will be supported by a NI 43-101 technical report to be filed on SEDAR within 45 days of this press release.

Interim Turmalina Gold Mine Mineral Resources

Turmalina Mineral Resources highlights are shown on Tables 5 and 6.

Table 5

Turmalina Gold Mine Mineral Resources Summary December 31, 2017, compared to December 31, 2016:

| Turmalina Gold Mine – Change in Mineral Resources | | | | | | | | Gold Ounces (000's) | Gold Grade (g/t) | | | | | | | As at December 31 | 2017 | 2016 | Change (%) | 2017 | 2016 | Change (%) | | Measured Resources | 265 | 246 | 8% | 5.7 | 5.36 | 6% | | Indicated Resources | 155 | 174 | (11%) | 3.86 | 4.12 | (6%) | | Total – M&I Resources | 420 | 420 | 0% | 4.86 | 4.77 | 2% | | Inferred Resources | 305 | 118 | 158% | 5.49 | 4.81 | 14% |

Table 6

Turmalina Gold Mine Mineral Resources Summary as at December 31, 2017, by Orebody:

| | | | Notes: | | | 1. | CIM (2014) definitions are followed for Mineral Resources | | 2. | Mineral Resources were estimated at a break-even cut-off grade of 2.1 g/t Au | | 3. | Mineral Resources are estimated using an average long-term gold price of US $1,400 per ounce | | 4. | Mineral Resources are estimated using an average long-term foreign exchange rate of 3.8 Brazilian Reais: 1 US Dollar | | 5. | A minimum mining width of 2 m was used | | 6. | Gold grades are estimated by the Inverse Distance Cubed interpolation algorithm using capped composite samples | | 7. | Mineral Resources are inclusive of Mineral Reserves | | 8. | Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability | | 9. | Numbers may not add due to rounding |

Mineral Resource estimates at December 31, 2017, reflect an updated geological and block model prepared by Jaguar staff under the supervision of RPA. This updated block model incorporates the results from the on-going diamond drilling campaigns commenced in 2017.

This Interim Mineral Resource includes total Measured and Indicated Resources of 420,000 ounces of gold (2.69 million tonnes at an average grade of 4.86 g/t Au) and Inferred Resources of 305,000 ounces of gold (1.73 million tonnes at an average grade of 5.49 g/t Au).

Current growth drilling, as well as drill holes completed in 2017, focused on demonstrating the extensions and continuity of the principal Orebodies A and C at depth beyond current mining production activities and quantifying observed increases in grade, tonnes and ounces per vertical metre.

Orebody C Mineral Resource grades have increased following from new exploration drill hole intercepts and from development channel sampling and infill drilling, in particular on Levels 3 and 4.

The resulting increases in Measured, Indicated and Inferred resources compared to the previously reported resource inventory is in line with the Company's target of replacing reserves mined in 2017 and establishing a significant increase in M&I resources mainly below Level 11 on Orebody A and Level 4 on Orebody C (see Figures 5, 6 and 7). (See press releases from November 2017and February 2018for further details.)

The database, used to prepare the estimates, with a cut-off date of January 15, 2018, comprises 3,650 drill holes and 15,365 channel samples. The estimate was generated from a block model constrained by three-dimensional (3D) wireframe models. A capping value of 50 g/t Au was applied for all three orebodies. The wireframe models of the mineralization and excavated material for Turmalina were constructed by Jaguar and reviewed by RPA. A separate wireframe was built for each orebody and was used to constrain the grade estimates into the block model.

The mineralized material for each orebody was classified into the Measured, Indicated, or Inferred Mineral Resource categories on the basis of the search ellipse ranges obtained from the variography study, the observed continuity of the mineralization, the drill hole and channel sample density, and previous production experience from these orebodies.