Toronto - Jaguar Mining Inc. ('Jaguar' or the 'Company') (TSX:JAG, OTCQX:JAGGF) announced financial results for the third quarter ('Q3 2022') ended September 30, 2022. All figures are in US Dollars, unless otherwise expressed.
Q3 2022 Financial Highlights
Revenue for Q3 2022 decreased 7% to $37.8 million, compared with $40.7 million in Q3 2021, mainly due to a decrease in the average realized gold price of $1,711 per ounce in Q3 2022 compared to $1,753 per ounce in Q3 2021.
Operating costs totaled $22.1 million in Q3 2022 compared to $19.4 million in Q3 2021. The 14% increase in operating costs was mainly due to inflation and head count increase in the past twelve months, with labour costs increasing by approximately 12%, mining materials by approximately 28%, and plant consumables increasing by approximately 4%.
Net income for Q3 2022 decreased to $6.5 million, compared with $11.4 million in Q3 2021. Major variances included a $2.9 million decline in revenue, $2.7 million increase in operating costs, $0.7 million reduction on foreign exchange gain, and a $0.7 million increase in finance costs, offset by an income tax expense reduction of $2.5 million.
Cash operating costs-1 increased 20% to $999 per ounce of gold in Q3 2022 compared to $833 in Q3 2021 due to a 14% increase in operating costs, attributed to inflationary pressure on mining materials and labour. All-in sustaining costs-1 increased to $1,331 per ounce of gold sold in Q3 2022, compared to $1,184 per ounce of gold sold in Q3 2021 due to the cash cost increase as explained above, partially offset by lower sustaining capital expenditures.
Free cash flow-1 in Q3 2022 was $8.4 million and was based on operating cash flow plus asset retirement obligation expenditures, less sustaining capital expenditures, compared to $9.8 million in Q3 2021. Free cash flow was $378 per ounce of gold sold in Q3 2022 compared to $423 per ounce of gold sold in Q3 2021.
Cash Position and Working Capital-1
As of September 30, 2022, the Company had a cash and cash equivalents position of $29.9 million, compared to $40.4 million on December 31, 2021.
As of September 30, 2022, working capital was $19.6 million, compared to $32 million on December 31, 2021. The decrease in working capital is due to a reduction of 14% or $5 million in operating cash flow generated during YTD 2022, combined with a 30% increase in net cash used in investing activities from $23 million YTD 2021 to $29.8 million YTD 2022, mainly due to the $7 million cash received as a result of the royalty sales 2021. Partially offset by a 31% reduction in net cash used in financing activities due to lower dividends payment during YTD 2022.
Vern Baker, President and CEO of Jaguar Mining stated: 'The Jaguar team has worked diligently through a difficult first half of the year to bring us back on track with our goals and objectives in the third quarter. Our performance delivered and demonstrated that Jaguar can operate consistently and produce at sustainable rates while increasing total development rates. I am pleased to report that Jaguar continues to produce cash flow allowing us to fund exploration and projects that grow the company in one of the greatest gold jurisdictions in Brazil. Our efforts to reduce operating and AISC are making a positive impact on the cash flow.
Jaguar has paid quarterly dividend for the past 9 consecutive quarters, which has yielded our shareholders a 5%+ annualized return and has spent over $35 million to identify and develop additional resources. The current global macro economic environment has resulted in a weakening of the gold price and global inflationary pressures on cost have resulted in operating margin compression. The Board and Management have decided to suspend the quarterly dividend for the time being in order to prioritize the maximization of cashflow to invest in growth capital, in particular the advancement of the Faina project and convert our exploration success into value enhancing propositions for our shareholders.
The Board of directors will continue to review, among other things, the Company's budget, cash flow forecast, growth opportunities and market conditions on a quarterly basis to determine whether dividends will be declared on Shares for future quarters.'
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. 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 Caete Mining Complex (Pilar and Roca Grande Mines, and Caete Plant). The Company also owns the Paciencia Gold Mine Complex, which has been on care and maintenance since 2012. The Roca Grande Mine has been on temporary care and maintenance since April 2019. Additional information is available on the Company's website at www.jaguarmining.com.
Contact:
Vernon Baker
Chief Executive Officer
Jaguar Mining Inc.
E: vernon.baker@jaguarmining.com
T: 416-847-1854
Hashim Ahmed
Chief Financial Officer
Jaguar Mining Inc.
E: hashim.ahmed@jaguarmining.com
T: 416-847-1854
Forward-Looking Statements
Certain statements in this news release constitute 'forward-looking information' within the meaning of applicable Canadian securities legislation. Forward-looking statements and information are provided for the purpose of providing information about management's expectations and plans relating to the future. All of the forward-looking information made in this news release is qualified by the cautionary statements below and those made in our other filings with the securities regulators in Canada. Forward-looking information contained in 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 'August,' 'could,' 'would,' 'might,' or 'will' be taken, occur or be achieved. All statements, other than statements of historical fact, August be considered to be or include forward-looking information. This news release contains forward-looking information regarding, among other things, expected sales, production statistics, ore grades, tonnes milled, recovery rates, cash operating costs, definition/delineation drilling, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of projects and new deposits, success of exploration, development and mining activities, currency fluctuations, capital requirements, project studies, mine life extensions, restarting suspended or disrupted operations, continuous improvement initiatives, and resolution of pending litigation. The Company has made numerous assumptions with respect to forward-looking information contained herein, including, among other things, assumptions about the estimated timeline for the development of its mineral properties; the supply and demand for, and the level and volatility of the price of, gold; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource estimates are based; the receipt of necessary permits; market competition; ongoing relations with employees and impacted communities; political and legal developments in any jurisdiction in which the Company operates being consistent with its current expectations including, without limitation, the impact of any potential power rationing, tailings facility regulation, exploration and mine operating licenses and permits being obtained and renewed and/or there being adverse amendments to mining or other laws in Brazil and any changes to general business and economic conditions. Forward-looking information involves a number of known and unknown risks and uncertainties, including among others: the risk of Jaguar not meeting the forecast plans regarding its operations and financial performance; uncertainties with respect to the price of gold, labour disruptions, mechanical failures, increase in costs, environmental compliance and change in environmental legislation and regulation, weather delays and increased costs or production delays due to natural disasters, power disruptions, procurement and delivery of parts and supplies to the operations; uncertainties inherent to capital markets in general (including the sometimes volatile valuation of securities and an uncertain ability to raise new capital) and other risks inherent to the gold exploration, development and production industry, which, if incorrect, August cause actual results to differ materially from those anticipated by the Company and described herein. In addition, there are risks and hazards associated with the business of gold exploration, development, mining and production, including environmental hazards, tailings dam failures, industrial accidents and workplace safety problems, unusual or unexpected geological formations, pressures, cave-ins, flooding, chemical spills, procurement fraud and gold bullion thefts and losses (and the risk of inadequate insurance, or the inability to obtain insurance, to cover these risks). Accordingly, readers should not place undue reliance on forward-looking information.
For additional information with respect to these and other factors and assumptions underlying the forward-looking information made in this news release, see the Company's most recent Annual Information Form and Management's Discussion and Analysis, as well as other public disclosure documents that can be accessed under the issuer profile of 'Jaguar Mining Inc.' on SEDAR at www.sedar.com. The forward-looking information set forth herein reflects the Company's reasonable expectations as at the date of this news release and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law. The forward-looking information contained in this news release is expressly qualified by this cautionary statement.
JAGUAR MINING INC. 
