Jaguar Mining Reports Q1 2017 Results, 86% Higher Production at Pilar, Exploration Success, Maintains Production Guidance for 2017

TORONTO, May 11, 2017

TORONTO, May 11, 2017 /PRNewswire/ -- Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX:JAG) today announced details of the Company's financial and operating results for the first quarter ended March 31, 2017 ("Q1 2017"). Complete Financial Statements and Management Discussion and Analysis are available on SEDAR and on the Company's website at www.jaguarmining.com. All figures are in US dollars, unless otherwise expressed.

Q1 2017 Financial Highlights

• Gold production increased 5% to 22,292 ounces and gold ounces sold increased to 24,035 ounces compared with 21,197 ounces produced and 22,881 ounces sold in Q1 2016, respectively.
• A temporary interruption of mining activities in one section of Orebody A at Turmalina was partially offset by an 86% increase in gold production at Pilar.
• Revenue was up 9% to $29.2 million, compared with $26.7 million in Q1 2016, and the average realized gold price of $1,215 was 4% higher compared with $1,165 in Q1 2016.
• The strengthening Brazilian Real over the US dollar had the effect of increasing unitary costs in the reporting currency. During Q1 2017, the Brazilian Real strengthened 19% against the US dollar, compared with Q1 2016. In addition to the currency impact, the following items impacted the costs in Q1 2017:
• Cash operating costs ("COC") increased 25% to $924 per ounce of gold sold, compared to $742 per ounce sold during Q1 2016, due to lower production at Turmalina and the increased cost for secondary development at Pilar.
• All in sustaining costs ("AISC") increased 22% to $1,323 per ounce of gold sold, compared to $1,086 per ounce sold during Q1 2016, mainly due to a 20% increase in sustaining mine development and purchases of new equipment for Pilar.
• Operating cash flow was $1.9 million, compared to $9.5 million in Q1 2016. Lower operating cash flow with continued investments in capital programs resulted in a cash balance of $18.2 million as of March 31, 2017, compared to a cash balance of $26.3 million at December 31, 2016.
• During Q1 2017, the Company also continued to invest in its Growth Exploration Program, initiated in November 2016, with approximately 25% of the drilling and development milestones achieved to date.
• The Company is maintaining 2017 production guidance of 100,000 – 110,000 ounces, which will be reviewed at the end of Q2 2017.
• In view of the volatility in the gold price and continued strengthening of the Brazilian Real since September 2015, the Company has initiated a cost reduction program to offset these external factors. This includes reducing the Roça Grande operations by approximately 40% in overall headcount at that site. Company-wide general and administrative costs have also been reviewed with the aim of reducing headcount in support functions. The Company will also continue its assessment of the maintenance departments to further incorporate preventive procedures, improve equipment availability, and reduce costs.
• Subsequent to the quarter end, Jaguar entered into a preliminary agreement with Sprott Private Resource Lending (Collector) LP ("Sprott Lending") for an additional tranche of $5 million on terms similar to those of the secured loan facility that Jaguar entered into with Sprott Lending on November 7, 2016.

Rodney Lamond, President and Chief Executive Officer of Jaguar commented, "A significant highlight of the first quarter of 2017 was the strong performance at Pilar which increased its gold production 86% to 8,485 ounces and its grade by 17% to 3.39 g/t, reflecting the advancement of ore development into the high-grade Orebodies BF and BFII. However, consolidated production of 22,292 ounces was much lower than targeted, mainly due to a change in mining sequence at Turmalina caused by temporary ground control conditions on Level 9. As a result, development activities were refocused onto Level 10. Earlier than planned advancement at Orebody C resulted in a decline in an overall average head grade to 3.79 g/t. The change in mine sequence to Level 10 is expected to positively impact operations in the near term, allowing for an increase in mine feed grades and will enable the recovery of Q1 gold production shortfall. The rehabilitation efforts to recover the remaining ounces on Level 9 of Orebody A will resume in the second half of 2017."  

"During the first quarter, we made investments of $6.9 million in capital expenditures towards primary development, exploration drilling, and new mining equipment. The recommissioning of Mill #3 at Turmalina provides operations with an increased milling capacity that is capable of processing 2,000 tonnes per day which will support higher production and lower unit operating costs in the future. Operating costs during the first quarter were higher than anticipated due to lower than expected production from Turmalina and the continued appreciation of the local Brazilian currency which has increased 19% over the US dollar since the first quarter of 2016. The AISC reflects the continued investments in sustaining capital expenditures and will be reviewed in light of Q1 results. At Pilar, AISC included approximately $350 per ounce of sustaining capital investment. This was largely related to the ongoing investment in primary development with additional new mining equipment arriving during the quarter. Higher COC at Pilar was derived by a significant 614 metres of secondary ore development."

Mr. Lamond concluded: "Looking ahead, we are maintaining our 2017 production guidance of 100,000 – 110,000 ounces, but we will conduct a review of guidance at the end of the second quarter. The Company is taking the necessary steps to manage costs during this time of lower gold prices and continued strengthening of the Brazilian currency. As we continue to experience cost pressures, we will be offsetting the impact with cost savings in other areas through operational productivity and efficiency improvements, reductions in capital, and slowing all non-core spending."

Q1 2017 Operating Highlights