CA - Jaguar Mining: A Tough Q1 With Softer Q2 Output On Deck

2024-06-20 17:31:09 ET

Summary

• Jaguar Mining had a rough Q1 despite easy year-over-year comps, reporting lower production at $1,600/oz AISC and limited free cash flow generation.
• Unfortunately, Q2 isn't expected to be much better because of grade issues called out at its smaller Turmalina Mine, suggesting another high-cost quarter on deck.
• Fortunately, the company has a tailwind from the BRL/USD, the benefit of a higher gold price, and it should be mining higher grades at Pilar next year.
• In this update we'll dig into the Q1 results, recent developments and whether Jaguar is trading near a buy zone after its recent multi-week correction.

The Q1 Earnings Season was one of the best to date for the gold sector, with most miners reporting solid free cash flow generation and $600/oz plus all-in sustaining cost margins. Unfortunately, Jaguar Mining ( OTCQX:JAGGF ) struggled to generate free cash flow and gold production is once again tracking behind annual guidance. However, we're now less than one month away from the much-awaited Q2 Earnings Season and while Jaguar expects to see another soft production quarter in Q2, we should see significantly improved margins and solid free cash flow generation, helped by the weakening of the Brazilian Real....

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