Gold Production Increases 96%
In Q2 2009, the Company produced 40,758 ounces of gold at an average cash operating cost of $466 per ounce compared to 20,782 ounces at an average cash operating cost of $455 per ounce during the same period last year, a production increase of 96%.
Q2 2009 gold production increased 24% or by 7,890 ounces over Q1 2009 gold production largely as a result of the re-start of leaching operations at Sabara in April 2009, which was idle during Q1 due to seasonal effects of heavy rainfall.
Q2 2009 gold sales rose to 35,560 ounces at an average price of $922 per ounce, 51% above the comparable Q2 2008 gold sales of 23,537 ounces at an average price of $900 per ounce.
Jaguar's Q2 2009 gold production was slightly ahead of the Company's 2009 Plan. Average cash operating costs of $466 per ounce were $66 per ounce above plan and $57 per ounce above Q1 2009 average cash operating costs caused by several factors including exchange rates, nelectricity rate adjustments, higher chemical costs, one-time non-recurring charges and the re-start of operations at Sabara, which had below-plan grades. Despite higher costs, the Company's actual Q2 2009 cash operating margin of $456 per ounce slightly exceeded the Company's expected cash operating margin of $450 per ounce.
Exchange rates in Q2 2009 averaged R$2.08 per $1.0 compared to R$2.32 per $1.0 in Q1 2009, a change of 11.5%. While Jaguar's costs were negatively impacted as a result of the strengthening of the Brazilian real relative to the U.S. dollar from Q1 2009 to Q2 2009, the Company's treasury management program resulted in a significant foreign exchange benefit during the quarter to offset the increase in cash operating costs. When Jaguar releases its Q2 2009 financials on August 10th, 2009, the Company expects to report a pre-tax benefit of between $8.0 and $10.0 million due to net realized and non-realized foreign exchange gains, significantly offsetting the increase in cash operating costs due to the stronger Brazilian real.
Daniel Titcomb, Jaguar's President and CEO stated, "Jaguar's operating teams continued to execute on plan during the second quarter. We maintain our 2009 production target of between 165,000 and 175,000 ounces, which was provided last November. The Turmalina Phase I Expansion is expected to be completed in Q3 and the construction of our new CaetŽ Project is on-schedule, both of which should further boost our output next year. With new higher-grade ore sources to feed the Pacincia carbon-in-pulp ("CIP") plant coming this quarter, our need to continue ore shipments from the Pilar mine will wind down and cash operating costs at Pacincia should drop substantially. We have increased our exploration budget in the Iron Quadrangle for the second half of the year and underground development continues at a robust pace. These efforts should give rise to a significant increase in our resource base over the coming months."
The company’s address is 125 North State Street, Concord, NH 03301, (603) 224-4800, fax: (603) 228-8045, email: [email protected].