Jaguar Mining Reports Strong Full-Year and Fourth Quarter 2016 Results; Generated $38 Million in Operating Cash Flow and Turned Free Cash Flow Positive

TORONTO, March 21, 2017

TORONTO, March 21, 2017 /PRNewswire/ - Jaguar Mining Inc. ("Jaguar" or the "Company") (TSX: JAG) today announced financial and operating results for the fourth quarter ("Q4 2016") and full-year ended December 31, 2016 ("FY 2016"). All dollar amounts are in thousands of U.S. dollars unless otherwise stated.

FY 2016 Consolidated Highlights

• Operating cash flow up 56% to $37.8 million as compared to FY 2015. Free cash flow turned positive year-over-year to $11.3 million.
• 2016 gold production of 96,608 ounces exceeded 2016 guidance. Delivered record gold recovery of 91%, higher grade of 3.74 g/t, and higher throughput levels.
• Increasing consolidated 2017 gold production guidance between 100,000 – 110,000 ounces.
• Substantial increase in capital investments with $25.4 million of sustaining capital in FY 2016 to transform operations, support a growing production profile, and expand mine life. Primary development increased 44% to 5,462 metres while secondary development more than doubled to 4,751 metres compared to FY 2015.
• Capital expenditures up 58% to $29.8 million, of which 85% was invested in sustaining capital, financed 100% through operating cash flow demonstrating the sustaining capability of the operations.
• Improved cash operating costs ("COC") to $719 per ounce sold, from $755 in FY 2015. Despite the strengthening of the Brazilian Real and restart of development at Pilar, the Company achieved the lower end of 2016 COC guidance range of $700 – $750 per ounce sold.
• All-in sustaining costs ("AISC") of $1,099 per ounce sold, reflects a 47% increase in sustaining capital spend.
• Working capital improved to $8.9 million as at December 31, 2016, up from $2.0 million at December 31, 2015.
  Working capital reflects a substantial increase in cash invested in primary and secondary development, up 44% and 113% respectively, and includes $10.3 million in loans from Brazilian banks which are renewed every six months and are all classified as short-term.

Q4 2016 Consolidated Highlights

• Strengthened the balance sheet with the full conversion of $21.5 million of the Senior Secured Convertible Debentures.
• Operating cash flow up 25% to $8.5 million after paying approximately $2.9 million in recoverable taxes.
• Consolidated gold production of 25,407 ounces, up 10% from 23,169 in Q4/15. Gold sales up 3% to 25,110 ounces.
• COC of $735 per ounce sold, up 16% from $631 in Q4 2015, primarily due to an appreciating Brazilian Real compared to the US dollar, and the restart of secondary development at Pilar, now positioned to commence stoping phase. 
• AISC of $1,098 per ounce sold, up 11%, from $991 in Q4 2015, reflecting higher sustaining capital spending across all three mines to accelerate primary development, exploration drilling, and equipment investments including the rebuild of the paste-fill plant and recommissioning of Mill #3 at Turmalina.
• Established a $10.0 million secured loan facility with Sprott Private Resource Lending (Collector) LP ("Sprott Lending") to fund $8.0 million in accelerated growth exploration commenced in 2017 at all operating mines.
• Entered into an arrangement with Avanco Resources Limited to develop and acquire up to 100% of the Gurupi Project through an Earn-In Agreement and NSR Royalty; while retaining exposure to full exploration upside of the property.

Rodney Lamond, President and Chief Executive Officer of Jaguar, commented, "2016 was a successful and transformational year for Jaguar Mining. We exceeded 2016 production guidance and improved cash operating costs to $719 per ounce sold, despite operating under a strengthening Brazilian foreign currency. Operating cash flow increased 56% to $37.8 million while free cash flow turned positive with $11.3 million generated during 2016. Capital investment across all operating mines significantly increased and the projects undertaken in 2016 were fully funded through operating cash flow. During the fourth quarter, Jaguar completed the conversion of all senior secured debentures to common shares which strengthened the balance sheet and our capital structure. Our ability to access capital enabled us to negotiate a $10.0 million secured loan facility with Sprott Lending. Up to $8.0 million of the facility will be used to fund an accelerated growth exploration program in 2017. Additionally, we entered into an arrangement with Avanco Resources Limited to advance the development of Gurupi while retaining Jaguar's exposure to the significant upside potential of the property."

"In 2017, we expect our gold production to increase to between 100,000 – 110,000 ounces. We are also focused on delivering lower unit costs through the formalization of company-wide expense controls, leveraging technology, and efficiency and productivity improvements from operational excellence programs at both Turmalina and Pilar. Consolidated cash operating costs are expected to be between $720 - $755 per ounce sold and AISC of $900 - $1,000 per ounce sold."

Mr. Lamond concluded: "Sustaining exploration drilling programs completed during 2016 were designed to grow and replace the mining depletion of mineral reserves at our core mining assets and to extend mine life. For 2017, we are confident that our growth exploration drilling programs will provide additional resource growth opportunities. Our team is reviewing and evaluating efforts to achieve the Company's strategic goal to increase production by 50% by adding back capacity from the Paciência mining complex. This asset was previously placed on care and maintenance in 2012. At our core assets, we are maintaining the increased pace of mine development and accelerated exploration programs to continue to build confidence in current geological models and mine plans. This focus will enable us to achieve our 2017 production guidance with an expected increase in production during the second half of 2017. We are confident and motivated on executing our five-year strategy of increasing the sustainable gold production profile to approximately 200,000 ounces per year."