Tudor Gold Corp. press release
Jaguar Reports Fourth Quarter and Full Year 2015 Operating and Financial Results, Significantly Lower Costs, Positive Operating Cash Flow
TSXV - TSX Venture Exchange · Gold · Copper · Silver · Lead · Zinc · Arsenic · Barium · Molybdenum · Canada
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Canada NewsWire
TORONTO, March 22, 2016
TSX-V: JAG
TORONTO, March 22, 2016/CNW/ - Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX-V: JAG)today announced operational and financial results for the fourth quarter ("Q4 2015") and 2015 fiscal year-end ("FY 2015"). Full Financial Statements and Management Discussion & Analysis documents are available on SEDAR and the Company's website at www.jaguarmining.com. All figures are in US dollars unless otherwise expressed.
Q4 2015 Highlights
Consolidated gold production of 23,169 ounces, up 3% compared to the fourth quarter of 2014 ("Q4 2014") Improved consolidated average head grade up 30% to 3.96 g/t in Q4 2015 from 3.04 g/t in Q4 2014 Revenue of $26.8 million, up 4% despite a 9% decrease in the average realized gold price, compared to Q4 2014 35% improvement in consolidated cash operating costs ("COC") to $631per ounce sold from $965in Q4 2014 26% improvement in consolidated all-in sustaining costs ("AISC") to $991per ounce sold from $1,343in Q4 2014 Operating cash flow of $6.8 million, up $8.0 millioncompared to negative operating cash flow of $1.2 millionin Q4 2014 Completed over-subscribed financing of Convertible Senior Secured Debentures (the "Debentures") for aggregate gross proceeds of $21.5 millionin October 2015
FY 2015 Highlights
Consolidated gold production of 90,421 ounces exceeded revised 2015 guidance 23% improvement in consolidated COC to $755per ounce sold from $980in FY 2014 21% improvement in consolidated AISC to $1,088per ounce sold, down from $1,378in FY 2014, and below annual 2015 guidance of $1,100 - $1,200per ounce sold Revenue of $106.5 millioncompared to $116.4 millionfor FY 2014 Operating cash flow of $24.2 millionfor FY 2015, compared to negative operating cash flows of $6.8 millionin FY 2014, despite a 9% decrease in the average realized gold price Net loss for the year ended December 31, 2015was $11.2 million(year ended December 31, 2014– net income of $130.9 million) due to the impact of the net impairment charge ($4.3 million), the change in the fair value of the convertible debentures ($4.8 million), and the increase in the legal provisions ($10.4 million) Received a total of $7.7 millionof cash tax refunds in respect of its Federal VAT input tax credits for years 2009 through 2011, for its operating Brazilian subsidiaries during FY 2015 (FY 2014 – $nil) Cash and gold bullion balance as of December 31, 2015was $15.3 million, up 71% compared to $9.0 millionas at December 31, 2014 As at December 31, 2015, working capital improved to $2.0 million, a significant achievement compared to the working capital deficiency of $23.2 millionas at December 31, 2014
Rodney Lamond, President and Chief Executive Officer of Jaguar commented, "We are very pleased with the continued progress of the Company, in terms of significantly lowering our unit costs by 23% and improving head grades by over 21%, while managing our tonnage and exceeding revised 2015 guidance. Going forward, with a strong and committed team in place, we are targeting achievable deliverables with a key focus on continuing to streamline company-wide operations. This focus will allow us to keep reducing our cash operating costs while optimizing operations. Furthermore, we are well positioned with a significantly improved balance sheet and working capital position to continue to invest in our current base of assets. Investments in our current operations via exploration and development will allow us to build confidence in our current mine models, and provide positive returns. These key focus areas will aid us in delivering a value-driven culture and deliver positive cash flows in the near term for all stakeholders."
Q4 & FY 2015 Financial & Operating Highlights
| | | | | | | | ($ thousands, except where indicated) | For the three months ended December 31, | For the twelve months ended December 31, | | | | | | 2015 | 2014 | 2015 | 2014 | | | Financial Data | | | | | | | IFRS Measures | | | | | | | Revenue | $26,820 | $25,766 | $106,513 | $116,362 | | | Cost of sales | 17,561 | 30,286 | 83,846 | 120,952 | | | | Depreciation (included in cost of sales) | 3,628 | 6,778 | 16,519 | 30,521 | | Gross margin | 9,259 | (4,520) | 22,667 | (4,590) | | | | Gross margin (excluding depreciation)1 | 12,887 | 2,258 | 39,186 | 25,931 | | Net income (loss) | 1,670 | (90,530) | (11,212) | 130,863 | | | | Per share ("EPS") | 0.02 | (0.81) | (0.10) | 1.69 | | EBITDA1 | 1,948 | (80,053) | 14,010 | 177,653 | | | Adjusted EBITDA2 | 8,154 | (4,305) | 22,161 | 5,006 | | | Non-IFRS Measures | | | | | | | Average realized gold price ($ per ounce)1 | 1,098 | 1,204 | 1,145 | 1,261 | | | Cash operating costs (per ounce produced)1 | 574 | 894 | 694 | 940 | | | Cash operating costs (per ounce sold)1 | 631 | 965 | 755 | 980 | | | All-in sustaining costs (per ounce sold)1 | 991 | 1,343 | 1,088 | 1,378 | | | Sustaining capital expenditures1 | 5,598 | 5,156 | 18,146 | 21,369 | | | Non-sustaining capital expenditures1 | 334 | 225 | 715 | 1,052 | | | Total capital expenditures3 | $5,932 | $5,381 | $18,861 | $22,421 | | | Operating Data | | | | | | | Ore processed (t) | 216,000 | 258,000 | 875,000 | 1,038,000 | | | Average head grade (g/t) | 3.96 | 3.04 | 3.67 | 3.03 | | | Gold produced (ounces) | 23,169 | 22,456 | 90,421 | 92,057 | | | Gold sold (ounces) | 24,416 | 21,400 | 92,988 | 92,264 | | | Definition drilling (metres) | 6,760 | 10,000 | 36,238 | 37,771 | |
| | | | 1. | Average realized gold price, sustaining and non-sustaining capital expenditures, COC and AISC, EBITDA and Adjusted EBITDA,
and gross margin (excluding depreciation) are non-gaap financial performance measures with no standard definition under IFRS.
Refer to the Non-IFRS Financial Performance Measures section of the MD&A. | | 2. | Adjusted EBITDA excludes non-cash items such as impairment and write-downs. For more details, refer to the Non-IFRS
Performance Measures section of the MD&A. | | 3. | These amounts are presented on accrual basis. Capital expenditures are included in our calculation of all-in sustaining costs. | | | |
| Cash and Gold Bullion | | | | | | ($ thousands) | | | December 31, 2015 | December 31, 2014 | | Cash and cash equivalents | | | $15,319 | $7,161 | | Gold bullion | | | - | 1,801 | | Total cash and gold bullion | | | $15,319 | $8,962 | | | | | | |
Q4 2015 and FY 2015 Financial Highlights
Revenue for Q4 2015 increased 4%, compared to the same period in 2014, mainly due to a 14% increase in ounces sold, offset by a 9% reduction in the average realized gold price. The 8% reduction in revenue for FY 2015 as compared to FY 2014 was mainly due to the $116per ounce decrease in the average realized gold price.
Positive Operating Cash Flow, Significantly Lower COC and AISC Lower than Annual Guidance
Cash operating costs ("COC") per ounce of gold produced during Q4 2015 were $574compared to $894during Q4 2014, a decrease of $320per ounce, or 36%. The decrease in costs was a result of an improvement in the average head grade by 30% and favourable foreign exchange as the Brazilian Real, the currency of our ongoing operations, weakened 51% against the US dollar (Q4 2015 average exchange rate was R$3.84per US dollar compared to Q4 2014 average exchange rate of R$2.54per US dollar).
The decreases in COC per ounce noted above were partially offset by the following cost increases: higher electricity tarrifs ($34per ounce), an increase in the cost of materials due to inflation ($21per ounce), and the allocation of all mine-site fixed overheads to mining activity at the Caeté Gold Complex due to the suspension of primary development at the Pilar and Roça Grande gold mines ($68per ounce).
Operating cash flow during Q4 2015 of $6.8 million, increased $8.0 million, from negative operating cash flow of $1.2 millionin Q4 2014, mainly due to lower costs due to improved grade, lower tonnage, and the benefit realized from the decline in the value of Brazilian Reais as compared to the US dollar.
For the full year 2015, operating cash flow was positive at $24.2 million, compared to negative operating cash flows of $6.8 millionin FY 2014, despite a 9% decrease in the average realized gold price.
In FY 2015, AISC decreased 21%, or $290, to $1,088per ounce of gold sold, compared to $1,378per ounce sold in FY 2014. Sustaining capital expenditures in FY 2015 were $18.1 million, which were 15% or $3.2 millionlower than FY 2014, mainly due to the suspension of development at Pilar.
AISC decreased 26%, or $352, to $991per ounce of gold sold in Q4 2015, compared to $1,343per ounce sold during Q4 2014. In Q4 2015, sustaining capital expenditures increased by $0.4 million, or 9%, to $5.6 millioncompared to $5.2 millionduring Q4 2014, primarily due to the restart of capital refurbishment activities for the mining fleet, following the completion of the financing (see below).
Adjusted EBITDA (excluding non-cash items and impairment) for Q4 2015 and FY 2015 was $8.2 millionand $22.2 millionrespectively, mainly due to lower COC and cash refunds of tax credits during the year.
Net loss for the year ended December 31, 2015was $11.2 million(year ended December 31, 2014– net income of $130.9 million) due to the impact of the net impairment ($4.3 million), the change in the fair value of the convertible debentures ($4.8 million), and the increase in the legal provisions ($10.4 million).
Financial Position
As at December 31, 2015, the Company had cash and unsold gold bullion on hand of $15.3 million($9.0 millionas at December 31, 2014). In 2015, the Company significantly improved its working capital and ended the year with positive working capital of $2.0 millioncompared to a working capital deficiency of $23.2 millionas at December 31, 2014. The improvement was mainly due to the successful completion of the over-subscribed financing of the Debentures.
The Company continues to review and implement cost control measures across the operations and corporate offices to improve operating cash flow and enhance the Company's working capital position.
On October 27, 2015, the Company closed an over-subscribed financing of the Debentures. Aggregate gross proceeds of $21.5 millionwere raised, of which approximately $8.4 millionwas used to repay Renvest Global Resources Fund ("Renvest") in order to transfer its interest in its credit facility with the Company to the convertible debenture subscribers. The Company plans to use the remainder of the proceeds to advance asset optimization plans in conjunction with the Company's ongoing development and production activities and for general corporate purposes.
In addition to the repayment of $8.4 millionto Renvest on closure of the financing, the Company repaid $9.9 millionof principal plus interest on the Renvest debt during FY 2015. The Company also had net repayments of $2.3 millionof principal on a portion of loans from Brazilian banks during the year. As at December 31, 2015, total debt was $41.2 million, compared to $31.0 millionas at December 31, 2014.
The Company received a total of $7.7 millionof cash tax refunds in respect of its Federal VAT input tax credits for years 2009 through 2011, for its operating Brazilian subsidiaries during FY 2015 (FY 2014 – $nil).
Q4 2015 and FY 2015 Operating Highlights
Strong Gold Production
Consolidated gold production during Q4 2015 and FY 2015, was 23,169 and 90,421 ounces respectively, compared to 22,456 and 92,057 ounces in the corresponding 2014 periods.
Turmalina Gold Mine increased production by 20% in Q4 2015 resulting in 14,449 ounces of gold produced compared to 12,067 ounces in the corresponding 2014 period. The increase in ounces produced was a result of a 33% increase in the average head grade. The higher grades were partially offset by lower tonnes processed during December 2015, primarily due to the unexpected shut down of Mill #2 for unscheduled repairs and maintenance (refer to press release dated December 21, 2015). Turmalina Mill#2 returned online in early January 2016and continues to perform well.
Caeté Gold Complex produced 8,720 ounces of gold in Q4 2015 compared to 10,389 ounces in Q4 2014, due to lower grades, for a total of 39,762 ounces in FY 2015, exceeding 2015 annual guidance of 36,000 ounces.
Improving Grades with Lower Tonnage
A total of 216,000 tonnes were processed in Q4 2015 (Q4 2014 – 258,000 tonnes) at an average head grade of 3.96 g/t (Q4 2014 – 3.04 g/t), a 30% increase in average head grade compared to the prior year. Total tonnes processed in Q4 2015 decreased 16%, compared to the same period in 2014, primarily due to an increased focus on mining higher grade.
A total of 875,000 tonnes were processed during the twelve months of 2015 (FY 2014 – 1,038,000 tonnes) at an average head grade of 3.67 g/t (FY 2014 – 3.03 g/t), an increase in grade of 21% compared to the same period of 2014.
At Turmalina Gold Mine, 100,000 tonnes (Q4 2014 – 117,000 tonnes) were processed in Q4 2015 at an average head grade of 4.79 g/t (Q4 2014 – 3.60 g/t).
Caeté Gold Complex processed 116,000 tonnes in Q4 2015 (Q4 2014 – 141,000 tonnes) at an average head grade of 2.59 g/t (Q4 2014 – 2.57 g/t).
Increase in Pilar Reserves of 310%
During 2015, the Company completed a strategically targeted drilling campaign at the Pilar and Turmalina gold mines with the goal of gaining increased confidence in the mineral resources and reserves, to facilitate better mine planning for 2016.
The exploration drilling results enabled the Company to announce a 310% increase in total Mineral Reserves to 172,000 ounces at Pilar, with a 63% increase in grade to 4.39 g/t Au, in its 2015 year-end mineral resource and mineral reserve estimate announced March 4, 2016. Based on the strong exploration drilling results and increased reserves and resources, primary and secondary development that had been suspended in Q4 2014, has been reinitiated at Pilar during Q1 2016.
Pilar Gold Mine Mineral Resource and Reserve Estimates as of December 31, 2015:
Proven & Probable Reserves:1,220 million tonnes grading 4.39 g/t Au, containing 172,000 oz Au
Proven Reserves: 164 million tonnes grading 3.15 g/t Au, containing 17,000 oz Au Probable Reserves: 1,056 million tonnes grading 4.58 g/t Au, containing 156,000 oz Au
Measured & Indicated Resources:3,479 million tonnes grading 4.59 g/t Au, containing 514,000 oz Au
Measured Resources: 709 million tonnes grading 4.25 g/t Au, containing 97,000 oz Au Indicated Resources: 2,770 million tonnes grading 4.68 g/t Au, containing 417,000 oz Au
_Inferred Resources:_1,208 million tonnes grading 5.45 g/t Au, containing 212,000 oz Au
2015 Results Compared to Guidance:
| | | | | | 2015 Revised | 2015 | | Guidance | Actual | | | Consolidated | | | | Brazilian Reais vs US dollar foreign exchange rate | 2.5 | 2.2 | | Gold production (ounces) | 89,500 | 90,421 | | Average head grade (g/t) | 3.30-3.75 | 3.67 | | Ore processed (t) | 925,000 | 875,000 | | Recovery rate (%) | 90% | 90% | | Cash operating costs (per ounce produced)1 | $800-$900 | $694 | | All-in sustaining costs (per ounce sold)1 | $1,100-$1,200 | $1,088 | | Definition/delineation drilling (metres) | 34,000 | 36,238 | | Turmalina | | | | Gold production (ounces) | 53,500 | 50,659 | | Average head grade (g/t) | 4.00-4.25 | 4.25 | | Ore processed (t) | 475,000 | 406,000 | | Recovery rate (%) | 90% | 91% | | Cash operating costs (per ounce produced)1 | $640-$700 | $540 | | All-in sustaining costs (per ounce sold)1 | $900-$1,000 | $890 | | Definition/delineation drilling (metres) | 25,000 | 25,603 | | Caeté | | | | Gold production (ounces) | 36,000 | 39,762 | | Average head grade (g/t) | 2.40-2.90 | 2.92 | | Ore processed (t) | 450,000 | 469,000 | | Recovery rate (%) | 90% | 90% | | Cash operating costs (per ounce produced)1 | $1,075-$1,175 | $891 | | All-in sustaining costs (per ounce sold)1 | $1,200-$1,300 | $1,027 | | Definition/delineation drilling (metres) | 9,000 | 10,635 |
| | | | 1. | COC and AISC are non-gaap financial performance measures with no standard definition under IFRS.
Refer to the Non-IFRS Financial Performance Measures section of the MD&A. |
Outlook for 2016
Jaguar remains strongly focused on delivering positive and sustainable physical performance, profitability, and cost optimization. The Company has established the following consolidated production and cost guidance for 2016 and represents achievable results from operations:
| 2016 Annual Guidance | | | | | Low | High | | | | | | Gold production (ounces) | 90,000 | 95,000 | | Ore processed (t) | 875,000 | 900,000 | | Recovery rate (%) | 90% | 90% | | Cash operating costs (per ounce produced)1,2 | $700 | $750 | | All-in sustaining costs (per ounce sold)1,2 | $950 | $1,000 | | Sustaining capital expenditures ($'000) | $23,000 | $25,000 | | Definition/delineation drilling (metres) | 28,000 | 32,000 |
| 1. | COC and AISC are non-gaap financial performance measures with no standard
definition under IFRS. Refer to the Non-IFRS Financial Performance Measures section of the MD&A. | | 2. | 2016 cost guidance has been prepared on the basis of a foreign exchange rate of 3.8 Brazilian Reais vs. the US dollar. |
Qualified Person Scientific and technical information contained in this press release has been reviewed and approved by Marcos Dias Alvim, BSc Geo., MAusIMM (CP), Project Development Manager, who is an employee of Jaguar Mining Inc., and is a "qualified person" as such term is defined by National Instrument 43-101 ("NI 43-101").
About Jaguar Mining Inc. Jaguar Mining Inc. is a Canadian-listed junior gold mining, development, and exploration company operating in Brazilwith three gold mining complexes, and a large land package with significant upside exploration potential from mineral claims covering an area of approximate 205,000 hectares. The Company's principle operating assets are located in a prolific greenstone belt in the state of Minas Gerais and include the Turmalina Gold Mine Complex ("Mineração Turmalina Ltda" or "MTL") and Caeté Gold Mine Complex ("Mineracao Serras do Oeste Ltda" or "MSOL") which combined produce more than 90,000 ounces of gold annually. The Company also owns the Paciência Gold Mine Complex, which has been on care and maintenance since 2012. 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 applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, management's assessment of Jaguar's future plans and operation. Certain statements throughout this press release constitute forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-Looking Statements can be identified by the use of words such as "are expected", "is forecast", "is targeted", "approximately", "plans", "anticipates" "projects", "anticipates", "continue", "estimate", "believe"or variations of such words and phrases or statements 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. Management does not have firm commitments for all of the costs, expenditures, prices or other financial assumptions used to prepare the financial outlooks or assurance that such results will be achieved. The actual results of Jaguar will likely vary from the amounts set forth in the financial outlooks and such variation may be material. Jaguar and its management believe that the financial outlooks have been prepared on a reasonable basis, reflecting the best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected production, grades, tones milled, recovery rates, cash operating costs, and definition/delineation drilling, in addition to overall expenditures and results of operations during 2016. However, because this information is highly subjective and subject to numerous risks, including the risks discussed below, it should not be relied on as necessarily indicative of future results. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Jaguar and described in the forward-looking information. The forward-looking information contained in this press release is made as of the date hereof and Jaguar undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.