go to
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/jaguar-mining
Jaguar Mining is a fast growing gold producer focused strictly on Brazil. It currently has two mines in production, one that is about to start commercial production, and one advanced development project. First I'm going to give a brief overview of operations, and then talk a little about some of the issues that are currently affecting the company.
Turmalina
Jaguar acquired the Tumalina project in 2004 from AngloGold. By 2005, they completed a feasibility study on it, and in late 2006 the mine was producing gold. Turmalina is an underground mine utilizing the "sublevel stoping" and the "cut and fill" mining methods with paste fill. It is currently processing 1,300 tonnes per day of ore in the CIP (carbon-in-pulp) plant.
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/jaguar-mining
Paciência is an underground mine utilizing the "cut and fill" mining method and a treated tailings backfillsystem. The property was acquired from AngloGold in 2004, and Jaguar brought the entire project into development. Paciência was commissioned in April 2008 and is currently processing 1,800 tonnes of ore per day in the CIP (carbon-in-pulp) plant.
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/jaguar-mining
Caete
Caete is Jaguar's newest mine which will enter commercial production this year. Jaguar intends to expand the processing plant in several phases to ultimately reach the 100,000-ounce level of annual production by 2012.
The regional processing facility was completed in late-May and the crushing circuit was commissioned on May 25. Testing of the milling circuit was conducted in early-June and the plant was charged with ore on June 12, formally entering the commissioning phase. The Caeté Project cost was US$105.4 million and was developed on-budget and on-schedule.
Mr. Daniel R. Titcomb, Jaguar's President and CEO stated, "The completion and inauguration of the Caeté operation is an important step for Jaguar and its shareholders. This new integrated mining complex will significantly enhance the Company's production profile and help us achieve our goal of becoming a mid-tier gold producer in 2011. The completion of this project on-time and on-budget further demonstrates the depth and talent of our team in Brazil; a team which has built and commissioned more underground operations in Brazil than any other management team. The Caeté operation is expected to become Jaguar's second largest and lowest-cost gold operation next year and will produce gold for years to come."go to
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/jaguar-mining
Gurupi
In December of 2009, Jaguar Mining acquired the Gurupi project from Kinross Gold for $39 million. Gurupi is an advanced stage development project and is key to Jaguar's production growth. Gurupi is lower grade but it's an open pit mine so cost shouldn't be extremely high.
In 2005, AMEC completed an internal feasibility study for Kinross, which reported measured and indicated mineral resources of 35,884,000 tonnes at an average grade of 1.35 grams per tonne of gold totaling 1,559,800 ounces at gold price assumptions of $400 per ounce. Jaguar engaged AMEC in late-2009 to provide a technical report for the Project based on a larger scope than outlined by Kinross in 2005.
The technical report was recently completed by AMEC in May 2010. Assuming an average gold price of $950 per ounce and a cut-off grade of 0.3 grams per tonne of gold, registers an estimate of 65,374,000 tonnes of indicated mineral resources at an average grade of 1.14 grams per tonne totaling 2,392,000 ounces. Probable gold reserves are estimated at 63,387,000 tonnes at an average grade of 1.14 grams per tonne totaling 2,322,000 ounces.
Jaguar is proceeding with the permitting and licensing of the project based on the technical report as prepared by AMEC.
However, the company has developed a preliminary internal study and addresses the following:
go to
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/jaguar-mining
* The possible inclusion of High Pressure Grinding Rolls ("HPGR") replacing SAG milling and Intensive Gravity technology into the overall process design, which the Company continues to evaluate
* Developing the Project in two phases: initially producing 3.6 million tonnes per year of ROM in Phase 1 for 3.5 years and increasing the mine output to the average 5.0 million tonnes per year. Phase 2, which is the life-of-mine average assumed in the pre-feasibility study.
According to the company:
"The two-phase approach in the development of the Project addressed in the internal study is estimated to reduce the initial pre-operational capital for the Project to $156.3 million; lower annual gold production to 118,000 ounces per year; increase cash operating costs to $555 per ounce, and generate a project with a 28% after tax internal rate of return and a net present value of $409 million. The payback period would be 2.4 years under this approach, that would allow the Company to generate the cash it believes would be necessary for the Phase 2 expansion to the 5.0 million tonne per year rate assumed in the pre-feasibility study."
Mr. Daniel R. Titcomb, Jaguar's President and CEO stated, "We are pleased that AMEC has completed its evaluation of the Project. Most importantly, for Jaguar's shareholders, the completion of this report brings an additional 2.3 million ounces of probable gold reserves, increasing the Company's total to 4.3 million ounces. A great deal of on-the-ground work still exists to add a fourth major gold operation that we expect will boost our growth profile above 650,000 ounces per year by 2015. Adopting a phase-in approach to the development of Gurupi, as we have employed at our current operations in southern Brazil, demonstrates how our team is focused on developing alternatives to raising equity capital for the projects we undertake."
Issues affecting the company
Brazilian Real
The strength of the Brazilian Real has really hurt Jaguar. Cash operating costs were significantly impacted by a much stronger Real in early-2010 compared to the previous year. The exchange rate in Q1 2010 averaged R$1.80 per $1.00 compared to R$2.32 per $1.00 in Q1 2009 or approximately 30% higher, which caused an increase in cash operating costs of approximately $120 per ounce.
The Real shows no sign of losing strength either, so this issue is going to continue to weigh on Jaguars cost.
Production issues
Turmalina and Paciência are under-performing slightly, management though is still confident they can deliver on production guidance since higher grade ore will be mined for the remainder of the year.
Cap Ex
For Jaguar to hit its production forecast for the next few years they are going to have to raise more cash. And with a market cap of only $710 million right now, that might be a little hard without causing some serious dilution in shares. This is also probably why Gurupi is going to be broken up into two phases. Cap ex is expected to be about $500 million over the next 3 years. Currently the company has about $100 million in cash.
Financials and Production
Q2 2010 Highlights:
* Net loss of $5.9 million or ($0.07) per basic and fully diluted share compared to net income of $9.7 million or $0.12 per basic and fully diluted share in Q2 2009. Net income for Q2 2010 was adversely impacted by significantly higher cash operating costs caused by higher-than-planned dilution at its underground mines, especially at Turmalina.
* Gold sales decreased to 30,646 ounces at an average price of $1,203 per ounce yielding revenue of $36.9 million compared to Q2 2009 gold sales of 35,561 ounces at an average price of $922 per ounce and revenue of $32.8 million.
* Gold production totaled 30,586 ounces at Turmalina and Paciência at an average cash operating cost of $746 per ounce compared to 35,806 ounces at an average cash operating cost of $447 per ounce during the same period last year (see Non-GAAP Performance Measures). The 15% drop in gold production and the net increase in cash operating costs from the prior year were attributable to a significant decrease in run-of-mine ("ROM") grades, primarily caused by abnormally high dilution.
As of June 30, 2010 the Company held cash, cash equivalents and short-term investments of approximately $64 million and $184 million of debt.
84.1 million shares outstanding, 101.2 million fully diluted
Conclusion
A few things are hurting Jaguar right now, a strong Brazilian Real, some missed production targets, and a underfunded cap ex budget. They are projecting production to grow at a fast pace over the next few years, the question is can they hit these targets? Especially when you consider the cost of this growth. They have $500 million in cap ex over the next few years, so they are going to have to raise some more cash here pretty soon. I'm sure investors are worried about dilution so that is weighing on the stock.
by
http://goldstocksdaily.com/2010/07/03/jaguar-mining/
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/jaguar-mining
Jaguar Mining is a fast growing gold producer focused strictly on Brazil. It currently has two mines in production, one that is about to start commercial production, and one advanced development project. First I'm going to give a brief overview of operations, and then talk a little about some of the issues that are currently affecting the company.
Turmalina
Jaguar acquired the Tumalina project in 2004 from AngloGold. By 2005, they completed a feasibility study on it, and in late 2006 the mine was producing gold. Turmalina is an underground mine utilizing the "sublevel stoping" and the "cut and fill" mining methods with paste fill. It is currently processing 1,300 tonnes per day of ore in the CIP (carbon-in-pulp) plant.
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/jaguar-mining
Paciência is an underground mine utilizing the "cut and fill" mining method and a treated tailings backfillsystem. The property was acquired from AngloGold in 2004, and Jaguar brought the entire project into development. Paciência was commissioned in April 2008 and is currently processing 1,800 tonnes of ore per day in the CIP (carbon-in-pulp) plant.
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/jaguar-mining
Caete
Caete is Jaguar's newest mine which will enter commercial production this year. Jaguar intends to expand the processing plant in several phases to ultimately reach the 100,000-ounce level of annual production by 2012.
The regional processing facility was completed in late-May and the crushing circuit was commissioned on May 25. Testing of the milling circuit was conducted in early-June and the plant was charged with ore on June 12, formally entering the commissioning phase. The Caeté Project cost was US$105.4 million and was developed on-budget and on-schedule.
Mr. Daniel R. Titcomb, Jaguar's President and CEO stated, "The completion and inauguration of the Caeté operation is an important step for Jaguar and its shareholders. This new integrated mining complex will significantly enhance the Company's production profile and help us achieve our goal of becoming a mid-tier gold producer in 2011. The completion of this project on-time and on-budget further demonstrates the depth and talent of our team in Brazil; a team which has built and commissioned more underground operations in Brazil than any other management team. The Caeté operation is expected to become Jaguar's second largest and lowest-cost gold operation next year and will produce gold for years to come."go to
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/jaguar-mining
go to
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/jaguar-mining
Gurupi
In December of 2009, Jaguar Mining acquired the Gurupi project from Kinross Gold for $39 million. Gurupi is an advanced stage development project and is key to Jaguar's production growth. Gurupi is lower grade but it's an open pit mine so cost shouldn't be extremely high.
In 2005, AMEC completed an internal feasibility study for Kinross, which reported measured and indicated mineral resources of 35,884,000 tonnes at an average grade of 1.35 grams per tonne of gold totaling 1,559,800 ounces at gold price assumptions of $400 per ounce. Jaguar engaged AMEC in late-2009 to provide a technical report for the Project based on a larger scope than outlined by Kinross in 2005.
The technical report was recently completed by AMEC in May 2010. Assuming an average gold price of $950 per ounce and a cut-off grade of 0.3 grams per tonne of gold, registers an estimate of 65,374,000 tonnes of indicated mineral resources at an average grade of 1.14 grams per tonne totaling 2,392,000 ounces. Probable gold reserves are estimated at 63,387,000 tonnes at an average grade of 1.14 grams per tonne totaling 2,322,000 ounces.
Jaguar is proceeding with the permitting and licensing of the project based on the technical report as prepared by AMEC.
However, the company has developed a preliminary internal study and addresses the following:
go to
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/jaguar-mining
* The possible inclusion of High Pressure Grinding Rolls ("HPGR") replacing SAG milling and Intensive Gravity technology into the overall process design, which the Company continues to evaluate
* Developing the Project in two phases: initially producing 3.6 million tonnes per year of ROM in Phase 1 for 3.5 years and increasing the mine output to the average 5.0 million tonnes per year. Phase 2, which is the life-of-mine average assumed in the pre-feasibility study.
According to the company:
"The two-phase approach in the development of the Project addressed in the internal study is estimated to reduce the initial pre-operational capital for the Project to $156.3 million; lower annual gold production to 118,000 ounces per year; increase cash operating costs to $555 per ounce, and generate a project with a 28% after tax internal rate of return and a net present value of $409 million. The payback period would be 2.4 years under this approach, that would allow the Company to generate the cash it believes would be necessary for the Phase 2 expansion to the 5.0 million tonne per year rate assumed in the pre-feasibility study."
Mr. Daniel R. Titcomb, Jaguar's President and CEO stated, "We are pleased that AMEC has completed its evaluation of the Project. Most importantly, for Jaguar's shareholders, the completion of this report brings an additional 2.3 million ounces of probable gold reserves, increasing the Company's total to 4.3 million ounces. A great deal of on-the-ground work still exists to add a fourth major gold operation that we expect will boost our growth profile above 650,000 ounces per year by 2015. Adopting a phase-in approach to the development of Gurupi, as we have employed at our current operations in southern Brazil, demonstrates how our team is focused on developing alternatives to raising equity capital for the projects we undertake."
Issues affecting the company
Brazilian Real
The strength of the Brazilian Real has really hurt Jaguar. Cash operating costs were significantly impacted by a much stronger Real in early-2010 compared to the previous year. The exchange rate in Q1 2010 averaged R$1.80 per $1.00 compared to R$2.32 per $1.00 in Q1 2009 or approximately 30% higher, which caused an increase in cash operating costs of approximately $120 per ounce.
The Real shows no sign of losing strength either, so this issue is going to continue to weigh on Jaguars cost.
Production issues
Turmalina and Paciência are under-performing slightly, management though is still confident they can deliver on production guidance since higher grade ore will be mined for the remainder of the year.
Cap Ex
For Jaguar to hit its production forecast for the next few years they are going to have to raise more cash. And with a market cap of only $710 million right now, that might be a little hard without causing some serious dilution in shares. This is also probably why Gurupi is going to be broken up into two phases. Cap ex is expected to be about $500 million over the next 3 years. Currently the company has about $100 million in cash.
Financials and Production
Q2 2010 Highlights:
* Net loss of $5.9 million or ($0.07) per basic and fully diluted share compared to net income of $9.7 million or $0.12 per basic and fully diluted share in Q2 2009. Net income for Q2 2010 was adversely impacted by significantly higher cash operating costs caused by higher-than-planned dilution at its underground mines, especially at Turmalina.
* Gold sales decreased to 30,646 ounces at an average price of $1,203 per ounce yielding revenue of $36.9 million compared to Q2 2009 gold sales of 35,561 ounces at an average price of $922 per ounce and revenue of $32.8 million.
* Gold production totaled 30,586 ounces at Turmalina and Paciência at an average cash operating cost of $746 per ounce compared to 35,806 ounces at an average cash operating cost of $447 per ounce during the same period last year (see Non-GAAP Performance Measures). The 15% drop in gold production and the net increase in cash operating costs from the prior year were attributable to a significant decrease in run-of-mine ("ROM") grades, primarily caused by abnormally high dilution.
As of June 30, 2010 the Company held cash, cash equivalents and short-term investments of approximately $64 million and $184 million of debt.
84.1 million shares outstanding, 101.2 million fully diluted
Conclusion
A few things are hurting Jaguar right now, a strong Brazilian Real, some missed production targets, and a underfunded cap ex budget. They are projecting production to grow at a fast pace over the next few years, the question is can they hit these targets? Especially when you consider the cost of this growth. They have $500 million in cap ex over the next few years, so they are going to have to raise some more cash here pretty soon. I'm sure investors are worried about dilution so that is weighing on the stock.
by
http://goldstocksdaily.com/2010/07/03/jaguar-mining/
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