/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE USA./
TSX: JAG
TORONTO, July 8, 2019 /CNW/ - Jaguar Mining Inc.
("Jaguar" or the "Company") (TSX: JAG) is pleased to
announce that on July 5, 2019 the
Company closed the first tranche of its previously announced
non-brokered private placement (the "Offering"). Pursuant to
the first tranche of the Offering, the Company issued 361,095,445
common shares (the "Common Shares") at a price per
share of CAD$0.085 (or USD$0.0634 at a deemed exchange rate of
USD$1.00 = C$1.34), for aggregate gross proceeds of
approximately USD$22.9 million.
The Company anticipates that it will use the net proceeds of the
first tranche for: (i) capital improvements and infrastructure
intended to improve production output and cost efficiencies at its
operating gold mines in Brazil;
(ii) advancing the Corporation's mineral exploration activities in
order to increase reserves and expected mine lives; (iii) the
repayment of a USD$7.85 bridge loan
due July 15, 2019; and (iv) for
general corporate and working capital improvement purposes.
Given that Jaguar insiders Eric Steven
Sprott and Tocqueville Asset Management LP participated in
the first tranche of the Offering, it constitutes a related party
transaction within the meaning of Multilateral Instrument 61-101
("MI 61-101").
Prior to the closing of the first tranche of the Offering (the
"Closing"), Mr. Sprott held 59,755,141 Common Shares
directly and held an additional 11,545,455 Common Shares through
2176423 Ontario Ltd. (a corporation which is beneficially owned by
him) for total holdings of 71,300,596 Common Shares, representing
approximately 21.7% of the Company's outstanding Common Shares on a
non-diluted basis.
Tocqueville Asset Management LP is a New York-based, SEC registered, investment
adviser firm and investment fund manager that manages a number of
investment funds, including the Tocqueville Gold Fund, which is a
mutual fund. Tocqueville Asset Management LP does not itself own
any securities of Jaguar, but has authority to exercise control and
direction over the assets of the Tocqueville Gold Fund, which held
64,330,707 Common Shares on a pre-Closing basis.
Prior to the Closing, Jaguar had 328,505,674 issued and
outstanding Common Shares. Pursuant to the closing of the first
tranche of the Offering, Jaguar issued 361,095,445 additional
Common Shares, representing 109.92% of its previously issued and
outstanding Common Shares. Pursuant to the first tranche of the
Offering, Mr. Sprott purchased 236,470,588 Common Shares
(representing USD$15 million and 60%
of the entire Offering) and as of the date hereof, after giving
effect to the closing of the first tranche of the Offering,
beneficially owns and controls 307,771,184 Common Shares.
Tocqueville Gold Fund purchased 67,620,000 Common Shares for total
holdings of 131,950,707 Common Shares.
The Company anticipates that it will close the second tranche of
the Offering for gross proceeds of approximately USD$2.1 million for a combined total of
394,117,647 Common Shares and aggregate gross proceeds of
USD$25 million from both tranches.
The closing of the Offering was bifurcated into two tranches since
a few smaller investors experienced administrative issues which did
not enable them to deliver funds in time to meet the July 5, 2019 closing date. The Company expects
the balance of funds to be delivered to the Company early during
the week of July 8, 2019 to
facilitate the closing of the second tranche. Accordingly, pursuant
to the closing of the second tranche of the Offering, Jaguar
expects to issue 33,022,202 additional Common Shares, representing
10.05% of its issued and outstanding Common Shares immediately
prior to the Offering. After giving effect to the closing of the
first tranche of the Offering, Mr. Sprott beneficially owns and
controls 307,771,184 Common Shares, which represents 44.6% of the
Company's outstanding Common Shares on a non-diluted basis. As a
result of the need to close the Offering in two tranches, a portion
of Tocqueville Gold Fund's investment was allocated to the second
tranche in order to maintain the pro-rata ownership of Tocqueville
Gold Fund. Tocqueville Gold Fund will purchase an additional
9,559,388 Common Shares in the second tranche for total holdings of
141,510,095 Common Shares, which will represent 19.6% of the
Company's outstanding Common Shares following the completion of the
second tranche.
Mr. Sprott acquired the Common Shares for investment purposes.
Mr. Sprott has a long-term view of the investment and may acquire
additional securities of the Company including on the open market
or through private acquisitions or sell securities of the Company
including on the open market or through private dispositions in the
future depending on market conditions, reformulation of plans
and/or other relevant factors. A copy of 2176423 Ontario Ltd.'s
early warning report will appear on the Company's profile on SEDAR
and may also be obtained by calling (416) 362-7172 (200 Bay Street,
Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J1).
The Offering is exempt from the formal valuation requirement and
minority shareholder approval requirement of MI 61-101 since the
Company relied upon the financial hardship exemptions that are
found in subsections 5.5(g) and 5.7(e) of MI 61-101. As described
in OSC Staff Notice 51-706, the financial hardship exemption of the
Toronto Stock Exchange (the "TSX") and the considerations
made by the Company and the TSX pursuant to the Company's
application to utilize that exemption are similar to, and based on,
the financial hardship exemption in MI 61-101. On May 27, 2019, the Company submitted a lengthy and
detailed application to the TSX (pursuant to the provisions of
Section 604(e) of the TSX Company Manual) whereby the Company
sought to utilize the "financial hardship" exemption from the TSX's
requirement to obtain shareholder approval for the Offering (as
otherwise required by section 604(a) and 607(g) of the TSX Company
Manual). The application was made upon the recommendations of both
the Finance & Corporate Development Committee and the Audit
& Risk Committee of the Company's Board of Directors, whose
members are free from any interest in the transactions and are
unrelated to the parties involved in the transactions, and was
based on their determination that the Offering is reasonable for
the Company in the circumstances. No member of the Company's Board
of Directors had a materially contrary view or any material
disagreement regarding the decision to proceed with the Offering.
If the Offering was the subject of a shareholder vote, then the
Company's Board of Directors would have unanimously recommended
that the shareholders vote to approve the Offering. Following the
TSX's review of the Company's application and the considerations
described in TSX Staff Notice 2009-0003, the TSX provided its
approval for the Company to announce the Offering (which occurred
on June 18, 2019) and, pursuant to a
letter dated June 25, 2019, provided
the Company with the TSX's conditional approval for the
Offering.
The TSX has informed the Company that the Company will be the
subject of a remedial delisting review. It is routine for the TSX
to require any issuer utilizing the financial hardship exemption to
be the subject of a remedial delisting review. Pursuant to this
delisting review, the TSX has required that, prior to October 16, 2019, the Company demonstrate to the
TSX that the Company complies with all of the TSX requirements for
continued listing after the completion of the Offering. With the
Closing now complete, the Company is confident that it is in a
position to satisfy these requirements and will make the
appropriate submissions to the TSX later this month.
In connection with the Closing of the first tranche, certain
arm's-length finders received an aggregate cash finder's commission
of approximately USD$68,000. It is
expected that certain arm's-length finders will receive an
aggregate cash finder's commission of approximately USD$12,800 related to the closing of the second
tranche of the Offering.
Pursuant to applicable Canadian securities laws, all securities
issued pursuant to the first tranche of the Offering are subject to
a hold period of four months and one day, expiring on November 6, 2019. The Offering remains subject to
the TSX's final approval.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the
securities in any State in which such offer, solicitation or sale
would be unlawful. The securities being offered have not been, nor
will they be, registered under the United
States Securities Act of 1933, as amended, and may
not be offered or sold in the United
States absent registration or an applicable exemption from
the registration requirements of the
United States Securities Act of 1933, as amended, and
applicable state securities laws.
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 64,000
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 and Caeté
Mining Complex (Pilar and Roça Grande
Mines, and Caeté Plant). The Company also owns the Paciência
Gold Mine Complex, which has been on care and maintenance since
2012 and the Roça Grande Mine which has been on care and
maintenance since April 2018.
Additional information is available on the Company's website at
www.jaguarmining.com.
Forward-Looking Statements
Certain statements in this news release constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking statements and
information are provided for the purpose of providing information
about management's expectations and plans relating to the future.
All of the forward-looking information made in this news release is
qualified by the cautionary statements below and those made in the
Company's other filings with the securities regulators in
Canada. 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. All statements, other than
statements of historical fact, may be considered to be or include
forward-looking information. This news release contains
forward-looking information regarding, among other things, the
Company's proposed use of the net proceeds of the Offering, the
completion and timing of any additional tranches of the Offering,
the outcome of the TSX's remedial delisting review, fundraising,
capital markets, expected sales, production statistics, ore grades,
tonnes milled, recovery rates, cash operating costs,
definition/delineation drilling, the timing and amount of estimated
future production, costs of production, capital expenditures, costs
and timing of the development of projects and new deposits, success
of exploration, development and mining activities, currency
fluctuations, capital requirements, project studies, mine life
extensions, restarting suspended or disrupted operations,
continuous improvement initiatives, capital improvements, operating
efficiencies, and resolution of pending litigation. The Company has
made numerous assumptions with respect to forward-looking
information contained herein, including, among other things,
assumptions about the estimated timeline for: the raising of
sufficient additional capital; the continued development of its
mineral properties; the supply and demand for, and the level and
volatility of the price of, gold; the accuracy of reserve and
resource estimates and the assumptions on which the reserve and
resource estimates are based; the receipt of necessary permits;
market competition; ongoing relations with employees and impacted
communities; political and legal developments in any jurisdiction
in which the Company operates being consistent with its current
expectations including, without limitation, the impact of any
potential power rationing, tailings facility regulation,
exploration and mine operating licenses and permits being obtained
an renewed and/or there being adverse amendments to mining or other
laws in Brazil and any changes to
general business and economic conditions. Forward-looking
information involves a number of known and unknown risks and
uncertainties, including among others: the risk of Jaguar not
meeting the forecast plans regarding its operations and financial
performance; uncertainties with respect to the price of gold,
labour disruptions, mechanical failures, increase in costs,
environmental compliance and change in environmental legislation
and regulation, weather delays and increased costs or production
delays due to natural disasters, power disruptions, procurement and
delivery of parts and supplies to the operations; uncertainties
inherent to capital markets in general (including the sometimes
volatile valuation of securities and an uncertain ability to raise
new capital) and other risks inherent to the gold exploration,
development and production industry, which, if incorrect, may cause
actual results to differ materially from those anticipated by the
Company and described herein. In addition, there are risks and
hazards associated with the business of gold exploration,
development, mining and production, including environmental
hazards, tailings dam failures, industrial accidents and workplace
safety problems, unusual or unexpected geological formations,
pressures, cave-ins, flooding, chemical spills, procurement fraud
and gold bullion thefts and losses (and the risk of inadequate
insurance, or the inability to obtain insurance, to cover these
risks). 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 news 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 news
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 news release
is expressly qualified by this cautionary statement.
SOURCE Jaguar Mining Inc.
