Jaguar Mining Reports Q1 2018 Operating Performance and Improving Costs; On Track to Achieve 2018 Gold Production of 95,000–105,000 Ounces

Toronto, April 17, 2018 – Jaguar Mining Inc. (“Jaguar” or the “Company”) (TSX: JAG) today announced operating results for the first quarter (“Q1 2018″) ended March 31, 2018. All figures are in US dollars, unless otherwise expressed. Detailed financial results for Q1 2018 will be reported and filed on or before May 10, 2018.

Q1 2018 Summary

  • Consolidated gold production of 18,864 ounces (174,000 tonnes milled at 3.67 g/t) was in line with the Company’s 2018 production plan; Q1 2018 production was lower than the 22,291 ounces (214,000 tonnes milled at 3.50 g/t) in Q1 2017.
  • Pilar Gold Mine (“Pilar”) production increased 13% to 9,553 ounces compared to Q1 2017, and 17% compared to Q4 2017 on average grade of 4.08 g/t, which increased 20% year-over-year. Pilar continues to deliver improved grade and tonnes milled. Pilar’s lower cost per ounce production replaces the higher cost Roça Grande Mine (“RG”) production, also improving operating cash flow.
  • Turmalina Gold Mine (“Turmalina”) production of 8,442 ounces was 34% lower year-over-year due to a focus on increasing primary (waste) development to facilitate increased ore production for the balance of 2018. This resulted in lower secondary ore development and lower tonnes milled for the quarter which reduced ore production, which was in line with the Company’s projected annual mine plan. Production levels are expected to increase in Q2 2018 and significantly increase in H2 2018 as accelerated primary waste development advances.
  • Turmalina primary waste development increased 77% during the quarter to 648 metres compared to 366 metres in Q1 2017 and 363 metres in Q4 2017. The focus in Q1 2018 was to extensively advance accelerated development to access higher-grade mineralization in Level 11 at Orebody A and Level 4 at Orebody C. A new total of four production sublevels are expected to contribute to production in Q2 2018.
  • Consolidated cash operating costs (“COC”) decreased to $814 per ounce sold, a 12% improvement from Q1 2017 and 10% increase from Q4 2017. Company on track to deliver 2018 COC annual guidance between $700–$800 per ounce sold.
  • Strengthened operations and project management teams to drive increased productivity and overall performance. Placed orders for new mining equipment to increase capacity and productivity at Turmalina and Pilar.
  • Cash balance of approximately $14.3 million as of March 31, 2018, compared to a cash balance of $18.6 million at December 31, 2017. Cash outflow during the quarter includes $3 million financing repayments reducing total bank debt to approximately $12.3 million at quarter end. Company generated approximately $4–5 million in operating cash flow with approximately $6 million spent in investing and growth activities.

Rodney Lamond, President and Chief Executive Officer commented, “We have successfully established a large mineral resource at Pilar and Turmalina as a direct result of our strategic investments in Growth Exploration programs, underground mine development and upgrading mining equipment. These investments demonstrate our commitment to growing sustainable gold production over the long-term. Through our investments, we have unlocked significant value at Pilar and its performance is increasing our ability to grow operating and free cash flow. Based on Pilar’s performance to date, we believe there continues to be excellent upside potential. We are taking the same approach to unlocking the deep value that we believe exists at Turmalina, which is also supported by its mineral resource.”

“Pilar’s first quarter operating results, including a 13% year-over-year increase in gold production driven by a 20% increase in head grade, are positively impacting our overall profitability and generating increased returns. This performance was achieved through targeted exploration programs, development and training of operations teams, disciplined capital allocation and operational excellence. The confidence in delivering increased gold production supported the Company’s decision to place Roça Grande temporarily on care and maintenance. This decision will further decrease the Company’s COC by displacing high gold ounces with Pilar’s lower COC ounces.”

Mr. Lamond continued, “In addition to the excellent ongoing work completed by our operations teams, during the quarter we successfully transitioned to a new mining contractor to increase high speed development at Turmalina. We completed key development objectives to access higher grade pay-shoots in Orebodies A and C. Primary waste development increased 77% during the quarter, the highest level since Q2 2016. The extensive accelerated development will continue to increase as key access drives are advanced into higher-grade mineralization in Level 11 at Orebody A and Level 4 at Orebody C. A new total of four production sublevels are expected to contribute to production in Q2 2018. To further support production and drive increased annual production, we have purchased two new underground loaders and one 30-tonne underground haulage truck for Turmalina.”

Mr. Lamond concluded, “Looking ahead, we are positioned to deliver stronger production in the second half of 2018 as we expect to see higher production at Turmalina, as well as higher production at Pilar. Ongoing infill drilling on Orebody A and C at Turmalina has demonstrated continued high-grade mineralization in upcoming sublevels for mining, which is expected to significantly increase production. Our strategy for sustainable production, which starts with a fundamental understanding of our geological models, aims to extend the reserve mine life at all of our operations by replacing depleted Mineral Resources in a timely manner through the execution of targeted exploration programs. We have also made important staffing changes at our sites to ensure we deliver on our productivity and efficiency targets to achieve our 2018 objectives. We continue to focus on mining quality ounces to generate cash flow, sustain future growth and reduce our bank debt.”

2018 First Quarter Operating Results Summary

Quarterly Summary Q1 2018 Q1 2017
Turmalina Pilar Roça Grande Total Turmalina Pilar Roça Grande Total
Tonnes milled (t) 81,000 81,000 12,000 174,000 113,000 84,000 17,000 214,000
Average head grade (g/t) 3.43 4.08 2.52 3.67 3.79 3.39 2.12 3.50
Recovery % 91% 89% 89% 90% 91% 91% 91% 91%
Gold ounces
Produced (oz) 8,442 9,553 870 18,864 12,736 8,485 1,070 22,291
Sold (oz) 8,414 9,929 894 19,237 13,536 9,422 1,076 24,034
Preliminary Financial Data
Cash Operating Costs1 ($/oz) 777 809 1,216 814 738 1,092 1,787 924
Primary (metres) 648 422 84 1,154 366 470 74 910
Exploration (metres) - - - - 104 13 34 151
Secondary (metres) 91 356 - 447 754 614 14 1,382
Definition, infill, and exploration drilling (metres) 5,544 3,197 613 9,354 4,164 5,218 567 9,949
  1. Cash Operating Cost is a non-IFRS reporting measure.

Cash Position and Working Capital

  • Cash balance of approximately $14.3 million as of March 31, 2018, compared to a cash balance of $18.6 million at December 31, 2017. Cash outflow during the first quarter includes $3 million for financing repayments reducing total bank debt to approximately $12.3 million at the end of Q1 2018.
  • Company generated approximately $4–$5 million in operating cash flow with approximately $6 million spent in investing activities. Working capital expected at $11–$12 million as March 31, 2018.

First Quarter Operating and Project Update

  • Operational excellence programs continue to be adopted Company wide. A key focus has been to improve data collection processes to deliver real time data that facilitates timely analysis and decision making.
  • Turmalina management changes have been completed and the focus is on operational efficiency, productivity and cost reduction on projects, including improving preventative maintenance and equipment availability.
  • At Pilar and Turmalina, operational excellence teams are focused on increasing haulage tonnes moved in the mine and development metres utilizing equipment within the same shift to improve recovery and increase productivity.
  • Restructured projects group to streamline the management of Growth and Capital Projects.
  • Turmalina paste fill plant completed final commissioning tests and is expected to be operational in Q2 2018.

First Quarter 2018 Exploration Highlights

  • Growth exploration at Turmalina has focused on depth extension drilling of Orebody C below level 4. Drilling completed to date includes approximately 4,826 metres (20 drill holes) representing approximately 53% completion of the 9,050 metres planned growth program.
  • Additional exploration activities are focused on advancing key near mine targets including the Zona Basal Target at Turmalina, the Torre, Pacheca North and Pilarzinho Targets contiguous to the Pilar mining operation and at Pedra Branca in Ceara State.
  • Subsequent to the temporary halt of mining activities at the RG Mine, exploration potential is being reviewed aimed at prioritizing future activities targeting extensions to the known RG orebodies and the Company’s highly prospective greater tenement package supported by the CCA Plant.

2018 Guidance

  • Pilar production guidance of 39,200–47,000 ounces reflects the Company’s reforecast for increased mineral resources reported in March 2018. The Pilar production is expected to offset the temporary halted production ounces from RG.
  • RG performance reflects production from January 1–March 21, 2018. RG temporarily on care and maintenance.
  • Turmalina positioned and expected to deliver significantly higher production in second half of 2018.
2018 Production & Guidance cost  Turmalina  CCA  Consolidated
Pilar RG
Low  High Low  High Low  High Low  High
Gold production (oz.) 50,000 57,000 39,200 47,000 800 1,000 90,000 105,000
Cash Operating Cost1 ($/oz. sold) 675 775 650 800 1,000 1,100 660 800
All-in sustaining cost1 ($/oz. sold) 900 1,000 900 1,050 1,050 1,200 920 1,100
Sustaining Capex ($’000) 12,000 15,000 9,000 12,000 100 500 21,000 28,000
Primary waste (metres) 2,200 2,800 2,000 2,600 N/A N/A 4,500 5,400
Secondary ore (metres) 1,800 2,100 1,000 1,150 N/A N/A 3,000 3,500
Definition, infill and exploration drilling (metres) 18,000 25,000 14,000 20,000 200 300 32,000 45,000
  1. Cash Operating Cost and All-in Sustaining Cost are non-IFRS reporting measures.

Qualified Persons

Scientific and technical information contained in this press release has been reviewed and approved by Jonathan Victor Hill, BSc (Hons) (Economic Geology – UCT), Senior Expert Advisor Geology and Exploration to the Jaguar Mining Management Committee, who is also an employee of Jaguar Mining Inc., and is a “qualified person” as defined by National Instrument 43-101 –Standards of Disclosure for Mineral Projects (“NI 43-101″).

The Iron Quadrangle

The Iron Quadrangle has been an area of mineral exploration dating back to the 16th century. The discovery in 1699–1701 of gold contaminated with iron and platinum-group metals in the southeastern corner of the Iron Quadrangle gave rise to the name of the town Ouro Preto (Black Gold). The Iron Quadrangle contains world-class multi-million-ounce gold deposits such as Morro Velho, Cuiabá, and São Bento. Jaguar holds the second largest gold land position in the Iron Quadrangle with just over 25,000 hectares.

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 covering an area of approximately 64,000 hectares. 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 Caeté Mining Complex (Pilar and Roça Grande Mines, and Caeté Plant). The Company also owns the Paciência Gold Mine Complex, which has been on care and maintenance since 2012. The Roça Grande Mine has been on temporary care and maintenance since April 2018. Additional information is available on the