TSX: JAG
TORONTO, Oct. 13, 2016 /PRNewswire/ -- Jaguar Mining
Inc. ("Jaguar" or the "Company") (TSX: JAG) is pleased to
report that a majority of holders of senior secured Convertible
Debentures (the "Debentures"), representing approximately 80% of
the principal amount of total outstanding Debentures, have elected
to convert their Debentures into common shares of the Company
("Common Shares"). The conversions of Debentures have resulted in
an increase in the Company's outstanding Common Shares to
257,035,227, which will be reflected on the TSX in the coming
days. This will also result in an increase in the Company's
market capitalization to approximately C$193
million (based on 257,035,227 shares valued at C$0.75 per share). With the conversion of the
majority of the Debentures, the Company has significantly
strengthened its balance sheet with the reduction of its senior
secured debt and savings of US$645,000 per quarter (approximately
US$2.6 million per year) in interest
payments, reflecting an immediate savings in the Company's annual
cash outflow. The Company is now in a zero "net debt" position,
considering the balance sheet at June 30,
2016. Net debt is defined as total debt, less cash.
On October 28, 2015, the Company
announced the closing of a US$21.5
million private placement of the Debentures with a maturity
term of three years (refer to the news release dated October 28, 2015 for full details). The
Debentures are convertible at the holder's option into Common
Shares at a price of C$0.15 per
Common Share, being a ratio of approximately 8,781 Common Shares
per US$1,000 principal amount of
Debentures, based on a fixed exchange rate of US$0.7592 per C$1.00.
Rodney Lamond, President and
Chief Executive Officer of Jaguar commented, "With the majority
of our Debenture holders electing to convert their holdings into
Common Shares, Jaguar is well positioned to further strengthen its
balance sheet with a significant reduction in debt. The voluntary
and early conversion of the Debentures also reflects the strong
confidence Debenture holders maintain in the potential of our
operating assets and management's ability to create lasting
shareholder value. We will continue to be financially prudent as we
execute our operating and exploration growth strategy and re-invest
funds, previously disbursed to paying the Debenture coupon, into
our core operating assets for future growth." Mr. Lamond
continued; "Lastly, we are pleased to welcome our new majority
shareholders, the Tocqueville Gold Fund and Eric Sprott. We value their support as an
integral part of our new capital structure."
Tocqueville Gold Fund and Eric
Sprott represent 77% of the Debenture holders electing to
convert their Debentures in exchange for Common Shares.
On October 5, 2016, the Company
issued a notice of redemption to holders of the outstanding
US$4,885,000 principal amount of
Debentures. As set out in the notice of redemption, the outstanding
Debentures will be redeemed as of November
8, 2016 (the "Redemption Date"), upon payment of a
redemption amount of US$1,212.79 for
each US$1,000 principal amount of
Debentures, being equal to the aggregate of (i) US$1,200, representing the price equal to 120% of
the principal amount of Debentures (the "Redemption Price"), and
(ii) all accrued and unpaid interest to but excluding the
Redemption Date. Each holder will have the right to convert their
Debentures into Common Shares of the Company, at a conversion price
of C$0.15 per Common Share at any
time on or prior to November 7,
2016.
On August 3, 2016, the Debentures
commenced trading on the Toronto Stock Exchange ("TSX"), allowing
Debenture holders to trade the Debentures.
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 191,000 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 ("Mineração Turmalina Ltda" or
"MTL") and Caeté Gold Mine Complex ("Mineração Serras do Oeste
Ltda" or "MSOL") which combined produce more than 90,000 ounces of
gold annually. The Company also owns the Paciência Gold Mine
Complex, which has been on care and maintenance since 2012.
Additional information is available on the Company's website at
www.jaguarmining.com.
FORWARD-LOOKING STATEMENTS
Certain
statements in this press release constitute "forward-looking
information" within the meaning of applicable Canadian securities
legislation. Forward-looking information contained in
forward-looking statements can be identified by the use of words
such as "are expected", "is forecast", "is targeted",
"approximately", "plans", "anticipates" "projects", "anticipates",
"continue", "estimate", "believe" or variations of such words and
phrases or statements that certain actions, events or results
"may", "could", "would", "might", or "will" be taken, occur or be
achieved. This press release contains forward-looking information
regarding the status of the Debentures and changes in the market
capital of the Company. The Company has made numerous
assumptions with respect to forward-looking information contained
herein, including, among other things, assumptions about the
estimated timeline for conversion and redemption of the Debentures
and general business and economic conditions. Forward-looking
information involves a number of known and unknown risks and
uncertainties, which, if incorrect, may cause actual results to
differ materially from those anticipated by the Company and
described herein. Accordingly, readers should not place undue
reliance on forward-looking information.
For additional information with respect to these and other
factors and assumptions underlying the forward-looking information
made in this press release, see the Company's most recent annual
information form and management's discussion and analysis, as well
as other public disclosure documents that can be accessed under the
issuer profile of "Jaguar Mining Inc." on SEDAR at www.sedar.com.
The forward-looking information set forth herein reflects the
Company's reasonable expectations as at the date of this press
release and is subject to change after such date. The Company
disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
law. The forward-looking information contained in this press
release is expressly qualified by this cautionary statement.
For further information: Rodney
Lamond, President & Chief Executive Officer,
rodney.lamond@jaguarmining.com, 416-628-9601; Joanne C. Jobin, Vice President, Investor
Relations, joanne.jobin@jaguarmining.com, 416-628-9601