CA - Jaguar Mining: Cheap But For A Reason

2024-01-23 14:01:59 ET

Summary

• Jaguar Mining saw a 12% decline in Q4 production year-over-year despite easy comparisons, with this being its worst Q4 on record since 2018.
• Worse, the company missed annual guidance for the third consecutive by one of the largest margins sector-wide, with an average annual miss vs. its initial midpoint of ~13,000 ounces.
• On a positive note, higher-grade stope ore from Faina should be available by Q4, but investors will have to trudge through a few high-cost quarters in the meantime.
• In this update we'll dig into Jaguar's Q4 production results, its forward outlook, and whether the stock is offering enough margin of safety after years of underperformance.

It's been a bumpy start to the year for the VanEck Gold Juniors Index ( GDXJ ) in what's typically the best month of the year from a seasonal standpoint, with an average return for the sector of ~2.6% in January over the past 30 years. This is evidenced by the index being down over 11% year-to-date, which is certainly disappointing for investors after gold put together a record eight straight weekly closes above the $2,000/oz level....

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