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TSX: JAG
TORONTO, July 9, 2019 /CNW/ - Jaguar Mining Inc.
("Jaguar" or the "Company") (TSX: JAG) is pleased to
announce that on July 8, 2019 the
Company closed the final tranche of its previously announced
non-brokered private placement (the "Offering"). Pursuant to
the final tranche of the Offering, the Company issued 33,022,202
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 gross proceeds of approximately
USD$2.1 million. Pursuant to both
tranches, the Company issued a combined total of 394,117,647 Common
Shares for aggregate gross proceeds of USD$25 million.
"We are very excited about the completion of the Offering and
the enthusiasm shown by current shareholders and new investors for
the oversubscribed financing," said Thomas
S. Weng, Chairman of Jaguar. "The proceeds from the Offering
are expected to drive significant changes at Jaguar while providing
an opportunity to bolster, among other things, capital equipment
and infrastructure, mine planning, optimization, reserves and mine
life while increasing expected gold production and reducing the
expected costs per ounce."
The Company anticipates that it will use the net proceeds of the
Offering 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 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 and final tranches 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 first and final tranches
of the Offering, Jaguar issued an aggregate of 394,117,647
additional Common Shares, representing 119.97% of its issued and
outstanding Common Shares prior to Closing. Pursuant to 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 and final tranches of the
Offering, beneficially owns and controls 307,771,184 Common Shares,
which represents 42.6% of the Company's outstanding Common Shares
on a non-diluted basis. Tocqueville Gold Fund purchased an
aggregate of 77,179,388 Common Shares for total holdings of
141,510,095 Common Shares, which represents 19.6% of the Company's
outstanding Common Shares on a non-diluted basis.
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 final tranche, certain
arm's-length finders received an aggregate cash finder's commission
of approximately USD$12,800.
Pursuant to applicable Canadian securities laws, all securities
issued pursuant to the first and final tranches of the Offering are
subject to, among other things, a hold period of four months and
one day, expiring on November 6, 2019
and November 9, 2019, respectively.
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
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.
