Jaguar Mining Inc. (JAG: TSX/NYSE Arca, JAG.NT: TSX) reports its financial and operational results for the period ended June 30, 2008. All figures are in US dollars unless otherwise indicated.
Q2 2008 Key Statistics
- Record quarterly revenue of $21.2 million.
- Adjusted earnings of $5.9 million or $0.09 per share.
- Cash flow from operations of $5.8 million before changes in non-cash working capital or $0.09 per share.
- CAPEX totaled $36.5 million.
- As at June 30, 2008, cash and cash equivalents of $64.4 million, including restricted cash of $3.1 million.
Commenting on the Q2 results, Daniel R. Titcomb, Jaguar's President and CEO stated, "We believe that the market's reaction to our preliminary results announced on July 31 has not accurately measured the underlying value of Jaguar by discounting our relatively low-cost investment and cost profile and tremendous growth program. Our second quarter progress and results were positive in several areas. We doubled mineral reserves, completed two feasibility studies, and launched construction of our third underground mine and CIP plant. We had record quarterly revenue, adjusted operating cash flow and adjusted earnings per share. We also announced the iron ore royalty off-setting the decline in cash flow from reduced 2008 production guidance. Moreover, our operating team's ability to develop long-lasting solutions to resolve short-term issues underscores their ability to execute on the potential."
Q2 2008 Highlights
- Adjusted earnings, primarily excluding the impact of an increase for the provision of taxes related to a revaluation of inter-company debt (see NON-GAAP PERFORMANCE MEASURES section below), totaled $0.09 in Q2 2008.
- Adjusted earnings, excluding the provision for taxes noted above, totaled $0.10 per share for the six months ended June 30, 2008.
- Sales in Q2 2008 increased to $21.2 million from $11.4 million in Q2 2007, an increase of 86% due to both an increase in ounces of gold sold and an increase in the average realized gold price. The number of ounces of gold sold in Q2 2008 increased to 23,537 from 17,177 ounces in Q2 2007, an increase of over 37%. The average realized gold price in Q2 2008 increased to $900 per ounce from $665 in Q2 2007, an increase of over 35%. Sales for the six months ended June 30, 2008 totaled approximately $40.0 million compared to $18.0 million for the same period in 2007.
- Gross profit in Q2 2008 increased to $6.0 million from $4.3 million in Q2 2007. Gross profit for the six months ended June 30, 2008 increased to $13.3 million from $7.7 million for the same period in 2007 due primarily to the increase in sales.
- Net income before income taxes in Q2 2008 increased to $7.2 million from a loss of $2.7 million in Q2 2007. Net income before income taxes for the six months ended June 30, 2008 increased to $8.2 million from a loss of $3.2 million for the same period in 2007.
- Cash flow from operating activities adjusted for the change in non-cash operating working capital generated $5.8 million of cash during Q2 2008 versus $4.1 million during Q2 2007 and generated $10.9 million of cash during the six months ended June 30, 2008 versus $4.2 million for the same period in 2007 (see NON-GAAP PERFORMANCE MEASURES section below). This increase in cash flow adjusted for the change in non-cash working capital is a result of an increase in sales and gross profit generated by the Company.
- As at June 30, 2008, cash and cash equivalents totaled $64.4 million, including $3.1 million of restricted cash, mostly related to foreign exchange hedges.
- In Q2 2008, the Company produced 20,782 ounces of gold at an average cash cost of $455 per ounce compared to 17,188 ounces at an average cash cost of $328 per ounce during Q2 2007. Costs for Q2 2008 were impacted by lower grades at Sabara and Turmalina, and the weaker U.S. dollar ("US$") against the Brazilian real ("R$"). On a per tonne of ore basis, mining and processing costs at Sabara and Turmalina were on budget. However, as run-of-mine grades were lower, particularly at Turmalina due to unexpected dilution, on a per ounce of gold basis, cash operating costs increased. Over half of the increase in average cash operating costs can be attributed to the weakness of the US$ while the balance was tied to lower grades. The average exchange rate in Q2 2008 was R$1.66/US$1.00 compared to R$1.98/US$1.00 in Q2 2007.
Mr. Titcomb added, "As we move forward, we are confident in our ability to deliver on our plan of becoming a highly profitable 700,000-ounce producer. Our existing projects, our expansions and our project under construction are the platform for creating value for those willing to invest in the Jaguar story. To help investors better understand Jaguar, in mid-October we will be conducting a tour of our operations near Belo Horizonte. We invite qualified investors and shareholders to join our tour and believe that those who do will get a better appreciation of the potential of our operations and plans and see the passion of our employees and management." -- www.cnxmarketlink.com
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Comments
#1 Same old excuses
It's the same thing every year. Q2 rolls around and, as usual, JAG confesses that production is below the expectations raised among investors by JAG at the start of the year. The fact is that JAG has missed its production and cost targets every year since it began. Look at the annual and quarterly records. If the normal pattern prevails, the usual Q2 confession will be followed by the usual Q4 confession that the whole year production will be below target. What kind of company tells investors to wait until 2014 for an imaginary 700,000 oz per year. If you believe that you you deserve to lose your money.